Burkina Faso: New Patriotic Support Fund Tax
On Friday, 5 January 2024, the Council (under the Ministry of Economy, Finance and Foresight) adopted a decree (Decret No 2024-0027/PRES-TRANS/PM/MEPFMFPTPS) establishing a compulsory withholding tax on the remuneration of public officials and workers in the private sector to increase the financial resources of the Patriotic Support Fund (FSP), which is necessary for the fight against terrorism as well as the reconquest and security of the national territory. This measure will also improve the remuneration and working conditions of Volunteers for the Defense of the Fatherland (VDP).
Following the adoption of this decree, the Ministry of the Economy, Finance and Foresight published a "Communique" for the attention of employers in the public and private sectors, containing the rules for this new withholding tax.
- The new withholding tax must be made from the month of January 2024 for the entire duration of the general mobilization.
- It applies to public officials of the State, as well as to private sector workers.
- A public official is defined in the decree as any civil or military person holding a legislative mandate, executive, administrative or judicial office, whether appointed or elected, on a permanent or temporary basis, regardless of the type of remuneration received and regardless of his or her hierarchical level or position; any other civilian or military person vested with a function or mandate, even if temporary, irrespective of the type of remuneration received and who, in this capacity, contributes to the service of a public body or public enterprise, or any other enterprise in which the State holds all or part of its capital.
- Private sector worker is defined in the decree as any person linked to another person, natural or legal, by an employment contract under the conditions of the Labour Code.
- The rate is 1% on net salary paid to the employee. This withholding tax is deducted by the employer from the employee and paid on behalf of the employee.
- Net salary means the sum of remuneration less the deduction for social security contributions and the single tax on salaries and wages (IUTS). Remuneration is defined in the decree as any form of cash remuneration paid in the course of or in connection with the performance of duties, such as salary, salary-related allowances, incentive bonuses, performance bonuses, balance-sheet bonuses and thirteen-month bonuses.
- In addition to the 1%, there is a 25% deduction on incentives/motivations (which are incentive bonuses, performance bonuses, balance-sheet bonuses and thirteen-month bonuses) and applies exclusively to the employees of public institutions, public establishments and state-owned companies (this does not apply to private sector workers, they only contribute the1% on incentives/motivations). This additional 25% is also deducted by the employer from the employee.
- Employers in the private sector must declare and remit this new withholding tax to the General Directorate of Taxes within the same deadlines as IUTS.
- For public employers, the new withholding tax must be remitted to the Treasury accounts of the Patriotic Support Fund no later than the 5th of the month following the month in which the deductions were made.