Tax exemptions continue to increase – 2024-07-26 17:25:39 – 2024-07-26 17:25:40 – 2024-07-26 17:27:39 – 2024-07-26 17:28:45 – 2024-07-26 17:31:52

The general budget for the financial year 2024-2025 provides for several tax exemptions aimed at stimulating investments. However, beneficiaries must be wary of attempts at diversion. Let us see together some products benefiting from the exemptions.

Law No. 1/19 of June 28, 2024, setting the general budget of the Republic of Burundi for the 2024-2025 financial year, provides for the exemption of imports worth 111.84 billion BIF. So, what products are concerned? Article 145 of the said law specifies that the importation of certified seeds, of animal and plant origin, is exempt from all duties, taxes and fees. In addition, the domestic delivery of these inputs, whether imported or produced locally, is exempt from Value Added Tax (VAT).

Article 160 provides for an exemption of income from newly constructed buildings for a period of two years from their first rental, with the exception of income from the subletting of these buildings. As for Article 161, it stipulates that vehicles, machinery and concrete mixers intended for institutions whose operating budget is the responsibility of the State are exempt from all import duties, taxes and fees, with the exception of those intended for institutions or companies of a commercial or industrial nature.

The exemption on the importation of motorized vehicles is significant

Article 155 grants an exemption from import duties and taxes for new, right-hand vehicles for the remunerated transport of people, with at least thirty seats. According to Article 163, electric or hybrid vehicles, motorcycles and tricycles are exempt from consumption tax. However, Article 164 specifies that the importation of a vehicle whose customs value reaches or exceeds USD 100,000 does not benefit from this exemption, except for vehicles of the diplomatic corps, consular and international organizations having conventions, treaties or international contracts ratified by Burundi.

Gas products are also taken into account. Article 156 provides for an exemption from import duties and taxes for metal scaffolding, raw wood, cooking gas and its containers, as well as for gas-fired cooking appliances.

Beneficiaries are warned against the misuse of exemptions!

Article 162 warns against any change in the destination of exempt goods and services. The deviant is penalized by the payment of exempt duties and taxes increased by a penalty of 100%. In addition, the person concerned is permanently excluded from the list of beneficiaries of tax benefits and must reimburse the amount of exemptions already received.

Please note that the exemption certificate is issued upon payment of 100,000 BIF per certificate, with the exception of exemptions governed by the Vienna Convention and by the law on the management of customs of the East African Community (ECA), according to article 157.

A look at the exemptions granted recently

The Standing Committee on Economic, Environmental, Financial and Budgetary Affairs published a report in July 2023 that revisits the issue of tax incentive measures. The document inventoried more than 200 companies that benefited from exemptions over the past 5 years and the sectors in which they operate. The value of the exemptions amounted to 260.2 billion BIF. Seven sectors of activity predominate among the companies that benefited from the exemptions.

Thus, the report revealed that 8 companies accumulated 71% of the total amount of exemptions (see the table below).