Currently ITS comprises of three different taxes payable by the employee, namely –

1. IS (Tax on Salary/Wages) which is 1.5% of 80% of taxable employment income.
2. CN (National Contribution) which is taxed at progressive tax tables on 80% of taxable employment income, and
3. IGR (General Income Tax) which is calculated using a specific formula and progressive tax tables, taking into consideration the employee’s family situation.

In practice, this is complex for both employees and employers responsible for making these deductions at source and remitting it to the Tax Authority. In addition to this, the mechanism of the family quotient lead to a certain inequality of treatment between employees, where if the family situation are the same, the highest earners are favored.

In order to modernize and simplify the current tax system (which has been in place since the early years of independence), ITS will be reformed to make it more user-friendly and become a more unform system.

The ITS reform will consist of the following:

• Merging the three taxes payable by the employee of IS, CN and IGR into one single payroll tax.
• Adopting a progressive tax table (which will consist of 6 brackets),
• Instituting a tax reduction/credit mechanism for dependents to replace the family quotient, to take into account the employee’s family situation (i.e., the marital status and number of dependent children).
• Establishing a zero-rate tax bracket for monthly taxable employment income less than 75 000 FCFA.
• Increasing the monthly exempt portion of retirement pensions and life annuities from 300 000 francs to 320 000 francs.
• Reducing tax on retired employees over 70 years of age, by reducing the tax with an abatement of 75%.
• The standard abatement/deduction of 20% will be repealed and the progressive tax tables will be applied to 100% of the taxable employment income