Exemption should be understood as the total or partial discharge of tax liability that one would have normally assumed.
The latter indeed invariably affects the taxation of income, consumption expenditure, capital and even the right to exercise an industrial, commercial or non-commercial activity.
I – Exemptions of a social character in the income tax
We must distinguish between measures that aim at corporate tax (CT) and those that affect personal income tax (PIT).
A – In terms of the Corporate Tax
Are exempted from the corporate tax:
- co-operative societies involved in production, processing, storage and sale of agricultural, livestock products and their unions operating in accordance with legal provisions governing them;
- agricultural, pastoral unions, and supply and purchasing cooperatives operating in accordance with the provisions governing them;
- mutual agricultural credit banks;
- societies and unions of mutual help societies;
- the profits realized by non-profit-making associations;
- organisations recognised as public utilities in charge of rural development;
- public agencies for low-cost housing;
- cooperative societies so-called “school cooperatives”;
- private educational institutions not pursuing profit making goals.
B ÔÇô With regards to the Personal Income Tax
Two categories of income are particularly concerned.
1) Salaries, wages, pensions and annuities
- family allowances or benefits;
- temporary allowances, benefits and life annuities paid to victims of accidents or their dependents;
- complementary allowance to the salaries of civil servants;
- exemptions of wages less than CFA 62 000 (sixty two thousand) francs;
- the pensions for injuries and disabilities granted to ex-service men;
- the capital received as a pension or compensation for death or consolidated compensation for death or injuries;
- bonuses allocated to workers on the occasion of the award of labour medals by the Minister in charge of labour;
- the share of the severance pay granted as damages under the social legislation, except money meant to cover the damage related to loss of wages.
2) Income from movable capital
- Interests remunerating investment savings accounts not exceeding ten million francs;
- interests from cash vouchers;
- the interests from housing savings accounts;
- overall net capital gains where they are less than or equal to CFA 500 000 francs.
II – Tax exemptions of a social character in the taxing of consumption
VAT and excise duties are not levied, inter alia on:
- rescue and assistance boats;
- the essential goods listed in Annex 1 of the General Tax Code as well as their inputs, notably:
- rice, flour, frozen fish, salt …
- pesticides, fertilizers and their inputs, as well as the other agricultural, livestock and fishery inputs used by producers;
- petit fishing equipment, seeds, agricultural machinery and equipment, as well as spare parts for the manufacturing of such devices and equipment;
- tuition and school fees received within the normal framework of the activity of school and /or university educational institutions duly authorized;
- slices called social consumption for households and on the following property
- water: up to 10 m┬│ per month;
- electricity: up to 110 KW per month;
- examinations, consultations, treatments, hospitalisation, analytical and bio-medical work and supplies of prostheses made in health facilities;
- contracts of life insurance and health insurance;
- materials used in the fight against HIV / AIDS;
- current expenditures covering the cost of utilities, notably civil status acts, legal expenses, education, police, assistance to disadvantaged people.
III – The tax exemptions of a social character in capital taxation
We shall distinguish registration fees on the one hand and stamp duties and land tax, on the other hand.
1) In terms of registration fees
Instruments exempted from the formality of registration or to be registered free of charge on purely social grounds include:
- all instruments whose fees are borne by welfare, agricultural assistance and mutual loans or cooperative organisations that are affiliated to them, not involving change of ownership or of possession;
- instruments of transfer of ownership or possession in general, all instruments signed between individuals or companies and public or private organisations whose goal is to build and make available either to their members or to outsiders of modest condition, cheap or low cost houses;
- judicial and extrajudicial acts and decisions made under or for the implementation of labour regulations, or family allowances, and proceedings for the recognition of natural children;
- instruments of legally constituted organisations which have provided in their statutes mutual assistance among their members;
- contracts of work certificate as well as all the instruments concerning the collective agreements containing neither transfer nor receipt;
- all contracts, receipts and papers issued by employers and insurance agencies for the enforcement of legislation relating to the prevention of occupational accidents and diseases;
- life certificates and other documents not involving transfer of possession or ownership, products for public accountants by the holders of annuities or pensions to obtain family allowances;
- the deeds and judgments in civil status matters;
- deeds, certificates and judgments made by virtue of the texts relating to medical service assistance;
- certificates of non conviction;
- all documents concerning the trusteeship of ownerless estates and property.
2) In terms of stamp duty and contribution of the stamp
The exemptions here include among other things:
- instruments done under and in enforcement of regulations on occupational injuries and illnesses as well as the expedition of the minutes of investigation that the parties may be issued in respect of labour accident;
- all instruments taken in execution of the labour legislation;
- the application of a person seeking legal assistance on plain paper;
- the application for certificates of non conviction issued to individuals;
- certificates of indigence, passports as well as visas, passports to be issued to indigent persons and recognised as unable to pay the amount;
- employment certificates issued to workmen, servants or employees;
- all deeds and transfers signed by social welfare agencies in carrying out their social mission and whose rights would be borne by those agencies;
- the proceedings for the recognition of illegitimate children;
- certificates of non-taxation, returns or copies of tax returns issued by the Administration.
3) In terms of property tax
These exemptions relate to real estate belonging to:
- the State, decentralised local authorities and public institutions which do not have an industrial and commercial purpose;
- to religious organisations and cultural or charitable associations declared as public utility in respect of their buildings meant for non-commercial use;
- equally exempted are, land exclusively used for agriculture, livestock and/or fishing.
IV ÔÇô Social tax exemptions relating to the right to exercise an industrial, commercial or non-commercial activity.
The right to practice is primarily constituted by the business licence contribution. Thus, the following are exempted from paying this contribution for social purposes notably:
- the State, decentralised local authorities, public establishments and State agencies for their cultural, educational, health, social, sporting or tourist activities, irrespective of their position in accordance with the taxation on turnover;
- cooperative societies of rural development, assistance and loans agricultural societies operating according to their purpose;
- private institutions of education;
- hospitals operated by religious denominations and non-profit making organisations;
- Savings, insurance unions, administered freely, mutual insurance duly authorised and operating within the terms of their objectives;
- farmers, growers, breeders, only for the sale and handling of fruits and crops from land owned or operated by them, or for the sale of livestock they breed, or maintain for fattening ;
- Fishers and registered maritime workers personally engaged in fishing and making the sale of the fishing products themselves;
- boatmen, with the exception of those who use steamers or engine boats;
- private institutions whose purpose is to gather poor children and give them a profession;
- those who sell as hawkers or in the streets or in traffic areas or in flower markets or edible menus;
- farmers selling firewood from the exclusive development of their plantations;
- explorers, hunters;
- the commissaries, agricultural unions and consumer cooperative societies, provided they have no sales stores.