• Total exemption for the acquisition and renewal of production equipment
• Donations and subsidies now deductible
L’The Transitional Legislative Assembly (ALT) adopted the law on tax and customs incentive measures for the benefit of small and medium-sized enterprises (SMEs). It was the Minister of Economy, Finance and Prospective, Dr. Aboubakar Nacanabo, who brought the file before the deputies.
It aims to accelerate the formation of a solid and competitive economic fabric carried by SMEs, through tax and customs incentive measures, according to the government. These measures will, among other things, encourage the creation of businesses, the formalization of businesses, the self-employment of young people and the creation of jobs, to strengthen the competitiveness and production capacity of Burkinabe SMEs, improve the viability of these SMEs and promote national economic growth. We recall that on April 28, 2023, the Council of Ministers had given its agreement for the transmission of the said bill to the Transitional Legislative Assembly.
We offer you the important points of the new law relating to the tax and customs advantages granted to SMEs, business incubators and incubators.
VAT, import duties and taxes
For the acquisition or renewal of production equipment and for the importation of goods transport vehicles and utility vehicles less than ten (10) years old, microenterprises and small enterprises in the production sectors of goods and processing benefit from total exemption from VAT, import duties and taxes, excluding community levies and taxes for services rendered.
The same applies to business incubators and incubators which benefit from VAT exemption on materials and services intended for the construction or acquisition of the premises of the said incubators and incubators, as well as for acquisitions on the local market for locally manufactured computer equipment, copying machines and office furniture.
Registration fees
During the creation phase, leases of buildings used for the operation of microenterprises and small enterprises are registered at the fixed rate of six thousand (6,000) CFA francs. They benefit from the same measure for the next two operating years. The same is true for business incubators and incubators.
The minimum flat rate collection
Newly created small businesses are exempt from the Minimum Flat Rate Collection (MFP) for the first two years of operation.
Liberties, donations and grants
In terms of income tax, donations made to incubators, business incubators, Approved Management Centers (CGA) and other public utility structures for the supervision and financing of SMEs are deductible without limitation.
The contribution of patents
Newly created small businesses, which come under the simplified tax system, benefit from an exemption from the business license contribution for the first two years of operation. They also benefit from a 50% reduction in the business license contribution for the third year of operation.
Employer and apprenticeship tax (TPA)
Newly created small businesses are exempt from TPA for the first two years of operation. They also benefit from a 50% reduction in the amount of TPA for the third year of operation.
Article 1 of the law specifies the following: “for the years 2023 to 2025, tax and customs incentives are instituted for the benefit of companies that have obtained the status of Small and Medium-Sized Enterprise (SME), pursuant to the provisions of la loi°015-2017/AN of 27 April 2017 on the orientation law for the promotion of small and medium-sized enterprises in Burkina Faso.
Synthesis Writing
framed
Encourage job creation
Composed of 15 articles, this law aims to accelerate the formation of a solid and competitive economic fabric supported by SMEs, through tax and customs incentive measures. These measures will, among other things, encourage the creation of businesses, the formalization of businesses, the self-employment of young people and the creation of jobs. This law also envisages improving the viability of SMEs and fostering national economic growth. The Minister in charge of the Economy, Dr. Aboubakar Nacanabo, reassured that despite being tax incentives, the consumer could not only be a promoter of SMEs, but also an employee of SMEs. In the long term, the law providing incentives for tax measures will permanently reduce the number of candidates for civil service competitions, in terms of job creation.
