Tax services are inadequate or stagnant

Mali faces problems in mobilizing internal resources to finance its public expenditure; this is because the tax system is unable to enforce the principle of tax equality among all taxpayers.

In Mali, although taxes represent 54.57% of budget revenues, or 1,260 billion CFA francs in 2024, the tax system does not enforce the principle of tax equality among all taxpayers. The principle of fiscal equality, understood as the pre-tax equality of taxpayers, is the basis of tax justice. In reality, 5% of taxpayers pay 95% of taxes.

This situation reflects the inadequacy of the taxpayer census. Ibrahim Abdoulaye Camara, the tax inspector of the legislative department of the General Taxation Directorate, admitted that some taxpayers are the only taxpayers identified and the only taxpayers. He made the comments during a webinar organized by the National Employers’ Council (CNPM) on November 30 on the theme “Improving Mali’s tax base: challenges and opportunities”.

The tax service suffers from the lack of a modern census system capable of relying on reality. Without this, we will never be able to expand the tax base. The tax resources we expect will never appear, warns Sory Ibrahima Makanguil, a tax consultant. Modibo Mau Makalu, former coordinator of the African Union Commission and the New Partnership for Africa’s Development and moderator of the webinar, asked how we can assess the tax system when we have no statistics and the economy is largely informal. He recalled that only 20% of the Malian economy is based on formal structures known to the state.

Mali has several types of taxes, including a comprehensive tax. It is calculated based on turnover. SONATAM head engineer Youssouf Traor insists that the application of the current tax system (comprehensive tax) would lead to immediate bankruptcy for taxpayers.

For example, a trader sells a bag of rice every year and has a turnover of 20,000 CFA francs, and his profit is 500 CFA francs. At the end of the year, the tax will demand 3%. An amount greater than his goodwill and profit. This means that many taxpayers evade tax services. The system is such that today he is forced to go underground. He explains that as long as people are underground, the tax base can never be expanded.

The uniform minimum tax is an obstacle to the creation of small and medium-sized industrial enterprises

The unified minimum tax is another bottleneck. This is the minimum amount below which the tax cannot be calculated (1% of capital). This fixed minimum is the same in the event of a deficit, regardless of its importance. Youssouf Traor judges that this tax is a huge obstacle to the creation of small and medium-sized industrial enterprises in the country, given that industry is by definition the opposite of commerce in the long run.

According to him, this tax requires companies that want to borrow from banks to fulfill their tax obligations. Not only do you need cash to operate industrial processes and products, but you also have to borrow from banks. This significantly reduces the return on investment and thus becomes an obstacle to obtaining financing for the creation of industrial companies. He noted that it is impossible to impose such a tax and think that we will industrialize our country.

Regarding the unified minimum tax, Sory Ibrahima Makanguil believes that our system is so badly designed in this regard that we don’t even pay attention to what is happening around us. Believe it or not, the unified minimum tax is almost everywhere. However, he stressed that Mali is one of the few countries that has a tax proportional to turnover.

And our neighbors have the highest price per floor. The President of the 2002 African Cup of Nations (COCAN) explained that this allows people to avoid bankruptcy in times of difficulty and, most importantly, allows them to get back to their best after a period of deficit.

Sory Ibrahima Makanguil said our tax administration is not up to the task. Inspectors audit some companies; their machines cannot even access documents. To this end, he called for technological resources, especially bandwidth, to be provided to the tax service.

You want to use a non-working telecommunications system or a telephone declaration system where energy is not allocated. ‘We are in an environment that is not conducive to efficient tax administration,’ he insisted.

Missing or incomplete research

The tax authorities do not possess the values ​​of modern administration. They are aging, unhealthy and unfit. The management of large tax companies and some tax centers in the Bamako region is the perfect example.

How to understand that you have to go through puddles, through toilets and unsanitary offices to deposit a cheque for two billion at the counter. This is not to say that the government is a model. Administration is to set an example. These are not even tax issues, but simple administrative management issues, he lamented.

In Mali, tax services are characterized by the absence or incompleteness of research. Sory Ibrahim Makanguil pointed out that it is impossible to have a modern tax administration without advanced research services, adding that paying taxes does not hurt anyone. Giving your income to the state, no one wants to do it without sanctions.

The lack or incompleteness of research largely explains the fact that people who advertise on media channels all day are subject to a comprehensive tax and are not even identified by the tax authorities. “This is a problem inherent in tax administration,” Sory Ibrahima Makanguil pointed out.

It should also be noted that the dematerialization of procedures is not enough. This makes it possible to combat all abnormalities and give citizens confidence. This lack of dematerialization brings problems in terms of payments.

“We once allowed taxpayers to pay through banks and other institutions. But whenever some of our clients did that, and we encouraged them, problems arose. Because there was a gap. The payments, the transfers ordered at the bank level, and the payments received at the Treasury level. There was very little communication between the Treasury and the tax administration,” stressed tax consultant Cheickna Tour.

Communication deficits

Taxpayers are often unaware of major tax reforms. This shows a lack of communication from the tax department. The SAT does not even have a relationship service worthy of the name, and its website does not provide adequate services.

Cheickna Tour stressed that a tax administration that does not communicate is a problem. He said that unlike in other countries, where the general management does not provide enough information on reforms, when major reforms are made, the Director General of the General Taxation Department will even go on TV or in front of the media to provide as much information as possible. He regretted that this was not always the case in our case.

Ibrahim Abdoulaye Camara, Tax Inspector at the Legislative Department of the General Directorate of Taxation, said that despite this, reforms to modernize tax administration are ongoing. Among the ongoing reforms, we can cite the introduction of standardized invoices, the digitization of tax services and the introduction of mobile payments.

Abdulrahman Sissoko