Togo Plans Excise Duty Cuts for Local SMEs in 2025

Public finance

Wednesday, 04 December 2024 13:27

Togo Plans Excise Duty Cuts for Local SMEs in 2025

(Togo First) - The Togolese government plans to cut excise duty rates on certain local products in 2025. The move was outlined in the Finance Bill approved last week by the Council of Ministers. The cuts should boost local production and support small and medium-sized enterprises (SMEs) by providing more favorable tax conditions.

Natural products produced by local SMEs and certified by authorized State bodies will receive reduced excise duties from January 1 to December 31, 2025. A regulatory act will define the specifics of these tax breaks.

This decision diverges from Article 243 of the French General Tax Code, which sets excise duties on various products. For instance, non-alcoholic beverages like energy drinks are taxed at 10%, while other non-alcoholic drinks are taxed at 5%. Beer and alcoholic beverages face taxes of 20% and 60%, respectively, while tobacco is taxed at 100%.

Necessities such as wheat flour and edible oils already enjoy reduced rates of 1%, while coffee and tea are taxed at 10%. Other products like high-powered vehicles and plastic bags incur a 5% duty, and luxury items like cosmetics and precious stones are taxed at 15%. In 2023, excise duties generated CFA54 billion for the state, with expectations to rise to CFA 66 billion next year.

By reducing duties for local SMEs—specific rates are yet to be announced—the government hopes to enhance their competitiveness, encourage local processing, and stimulate the national economy. Excise duties are a crucial revenue source for the state, and the government aims to use them to regulate consumption and promote small local industries. This reduction supports a broader initiative to assist small and medium-sized businesses, which has been a focus of various efforts in recent years. A key tool for supporting these companies, the MSME charter, is expected to be implemented soon. This charter outlines ambitious measures to address challenges such as access to financing.

Fiacre E. Kakpo

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