Tax revenue: a “modest” 2023 budget

2023-04-17 08:13:42

• For a country at war

• Tax land income, administrative leases

• Without forgetting the tax on wealth and large fortunes…

Come observers have often criticized successive governments for their lack of ambition in terms of tax revenue collection. Because they do not explore all tax loopholes. That of Captain Ibrahim Traoré, Head of State since September 30, 2022, was no exception to the rule. It has a “war” budget estimated at 2,631.3 billion FCFA in revenue for 3,235.9 billion FCFA in expenditure, a gap to be filled of 604 billion FCFA.

According to the Executive Director of the Center for Information, Training and Studies on the Budget (CIFOEB), Youssouf Ouattara, the budget of the current Transition might be more substantial if certain tax loopholes had been explored.

For this expert in public finance, it was enough for the government of Me Apollinaire Kyelem de Tambèla to look at administrative leases, tax on property income, tax on capital gains on real estate, tax on heritage and big fortunes…. Such tax loopholes might, according to Youssouf Ouattara, allow the power in place to have a robust “war budget” to deal with the insecurity that has plagued the country since 2015. Also, he says, this money collected might facilitate the care of internally displaced persons who are constantly on the increase.

“The more the budget increases, the more insecurity increases”

Another regret of the Executive Director of CIFOEB is the lack of consistency in the increase in the budget devoted to defense and security. The said amount increased from 416 billion FCFA in 2022 to 600 billion FCFA in 2023. He insists that with the increase in the budget, insecurity should be in a negative correlation instead of a positive correlation on the battlefront. “The more the budget increases, the more insecurity increases,” he laments. Faced with this desolation, he sees three hypotheses: first, the State has not injected substantial financial resources capable of reversing the trend. Anything, he said, that would allow the government to have substantial financial means to equip itself with sophisticated means adapted to the reality on the ground. Secondly, substantial resources are available, but defense and security players are struggling to define their own needs to block the way to terrorists. Third, the mismanagement of public finances intended for defense and security.

CIFOEB welcomes the audit of the army

CIFOEB, which has always campaigned for an audit of public funds allocated to defense and security, was delighted that ASCE-LC can now do so. For him, auditing army funds is a guarantee of transparency vis-à-vis the Burkinabè taxpayer. He welcomes the institutionalization of the function of Inspector General of the National Armed Forces, through the appointment of a senior officer to this post. To counter insecurity, the Head of State asked for the contribution of all Burkinabè, through the concept of war effort. On April 3, 2023, the first session of the Patriotic Support Fund (FSP) mobilized the sum of 7,754,043,516 FCFA.

An action that the expert in public finance welcomes and encourages, because it testifies to a participatory and civic commitment of Burkinabè.

He stresses that through the FSP, the State will have liquidity that it can use at any time. The unions have rejected the idea that the government takes 1% of workers’ wages in the contribution to the war effort. The CIFOEB thinks that the outstretched hand of the government was an opportunity for the workers to ask the State for more political will to activate other tax revenue levers or initiate courageous economic reforms.

Ambéternifa Crépin SOMDA

framed

Tax loopholes, what the CERA-FP thinks

In a citizen analysis of the initial finance bill 2023, made public on December 14, 2022, the CERA-FP pointed out that wealth is not taxed in Burkina Faso, while there are large fortunes in the country. . For this institution specializing in public finance, these analyzes call for improving the progressivity and fairness of the tax system. The center notes that it is imperative to increase this share of direct taxation by optimally covering all the types of taxes concerned, especially tax on property income and tax on capital gains on real estate (see graph 1 ).

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