Benin's new tax laws 2022

Benin's tax authority (DGI) has published the Finance Law for 2022 (Law No. 2021-16 of 23 December 2021). Some of the main measures of the law are summarized as follows:

  • The renewal of several prior measures,  including:
  • o an exemption from all customs duties and taxes and VAT during the period 1 January to 31 December 2022 for:
  • new trucks imported, manufactured, or sold in new condition in Benin;
  • new four-wheeled vehicles imported, manufactured, or sold in new condition in Benin and intended for the establishment of a fleet of taxis in the major cities (excluding large and commercial vehicles);
  • buses, coaches, and minibuses of all categories, imported, manufactured, or sold in new condition in Benin and intended for public transport;
  • aircraft and aerostats and their spare parts; and
  • containers for compressed or liquefied gases and accessories (burners, pot supports, pipes, fittings, regulators, gas stoves without oven, and tap-regulators) imported, manufactured, or sold in Benin;
  • o the rate of "statistical tax" (T.STAT) on petroleum products under the re-export regime is 1% of the customs value of the products from 1 January to 31 December 2022;
  • o from 1 January to 31 December 2022, taxpayers that, for the first time, voluntarily file declarations for previous years and pay the full amount of taxes due will be relieved from penalties, fines, and tax increases, provided that there is no tax audit or ongoing investigation;
  • o continued measures for COVID-19 from 1 January to 31 December 2022, including:
  • An exemption from all customs duties and taxes and VAT on health equipment, materials, and other health inputs used in the fight against the Covid-19 pandemic; and
  • An exemption from taxes, duties, and fees, with the exception of income tax, on contracts for the supply of services and works, import and delivery of equipment, materials, and consumables related to the response to the COVID-19 pandemic;
  • Several new measures, including:
  • o subject to request, an exemption from customs duties and taxes and VAT on new materials and equipment imported into Benin by small and medium-sized enterprises not benefiting from a derogatory tax regime, intended for the installation of artisanal and industrial units;
  • o passenger cars and other motor vehicles designed for the carriage of persons imported, manufactured, or sold in new condition in Benin benefit from the following customs and tax benefits during the period 1 January to 31 December 2022:
  • a reduction in the customs value by 100% for new electric cars; 95% for new hybrid cars; and 90% for other new cars; and
  • an exemption from VAT collected at customs

  • o from 1 January 2022, electric and hybrid motorcycles manufactured or sold in Benin are exempt from customs duties and VAT;
  • o the rate of "statistical tax" (T.STAT) on machinery and equipment, for agriculture, livestock, aquaculture, and fisheries, and their part, is 1% of the customs value of the products from 1 January to 31 December 2022;
  • o from 1 January 2022, a charge called the Urban Development Charge (RAU) and a fee called the Corridor Security Charge (RSC) are introduced on imports:
  • RAU is levied at the rate of 0.5% ad valorem on all imported goods subject to a consumer regime, with the exception of basic necessities such as sugar, milk, pharmaceutical products, and agricultural inputs; and
  • RSC is levied at the rate of 0.5% ad valorem rate on all imported goods subject to a transit procedure, with the exception of hydrocarbons destined for hinterland countries and uranium from Niger;
  • o new equipment and materials imported into Benin, as well as local materials, intended for the construction of service stations, sidewalk stations, and oil and diesel tanks are exempt from customs duties and taxes and VAT during the period 1 January to 31 December 2022.

The Finance Law for 2022 enters into force on 1 January 2022.

In addition to the Finance Law, Benin's Ministry of Finance has also announced the adoption of a new General Tax Code that consolidates prior laws and regulations and introduces new provisions. According to the Ministry, the new code:

• Simplifies and corrects inconsistencies in the taxation rules;

• Updates obsolete, redundant, or irrelevant provisions;

• Introduces incentives into the tax system for SMEs in general and for those in the digital sector in particular; and

• Balances relations between the administration and taxpayers with clear procedural provisions.

Although details are limited, additional releases on certain beneficial measures provided by the new code have been published, including:

• Tax benefits to promote persons in the informal sector with turnover up to 50 million CFA francs to join Approved Management Centers, including a 40% reduction in corporate tax, tax on business profits, or professional tax for four years, as well as an exemption from audits for two years;

• Tax benefits for start-ups innovating in the field of Information and Communication Technologies (ICT) with annual turnover up to 100 million CFA francs, including an exemption for corporate income tax and employer payments on wages for the first two years, with a 50% reduction for the third year; and

• A single tax rate of 12% from 1 January 2022 on all rental income from buildings, whether furnished or not.

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