TOGO : A 2024 finance law for new measures
In order to expand the tax base, certain decisions have been made in the 2024 budget law. Among them is the application of an 18% rate to hotels and similar establishments for Value Added Tax (VAT).
Indeed, the 2024 budget law foresees the removal of the reduced 10% rate that has been applied to hotels and similar establishments since 2020 under VAT.
This reduced VAT rate of 10% was introduced in the context of the Covid-19 health crisis in 2020, replacing the standard 18%, to support the severely impacted hotel sector during the pandemic.
Therefore, after the pandemic period, it becomes necessary to revert to the normal rate applied to the sector in the post-Covid-19 period.
« The resumption of activities in this sector argues in favor of restoring the normal rate. It is proposed to remove this reduced rate and return to the normal rate of 18% for all operations », justified the government.
The tax base is also expanded to include proceeds from games of chance. The 2024 budget law proposes taxing income derived from winnings. The reform aims to subject lottery winnings and other gambling gains to income tax on the part of the bettors.
Regarding excise duties, there is an increase in the rates of indirect taxes on certain products. In this regard, the adjustment of these rates is applied in compliance with the thresholds set by the West African Economic and Monetary Union (WAEMU).
These consumer products include beer, other alcoholic beverages, energy drinks, food bouillons (cubes), and plastic bags.
In terms of taxes…
The 2024 budget law includes, among other things, a specific tax on used vehicles and the restriction of the scope of exemptions from the Land Tax on built-up properties of residential houses. In other words, an exemption is a legal mechanism by which a person or operation that falls within the scope of the tax and is normally taxable is exempt from taxation under an express provision of the law.
Therefore, limiting the scope of the exemption from the Land Tax on properties gradually makes the property tax increasingly important, if not mandatory. Previous reforms had eliminated this tax on secondary residential houses. Now, there will be no more exemption to broaden the tax base.
