OBG talks to Madeleine Berre, Partner and GM, Deloitte Legal and Tax; and Nicolas Balesme, Partner and GM, Deloitte Touche Tohmatsu

Interview: Madeleine Berre, Nicolas Balesme 

To what extent can the recent tax incentives strengthen local businesses’ competitiveness?

MADELEINE BERRE: The Finance Law 2013 has incorporated a number of new fiscal measures to strengthen the competitiveness of local businesses, including a drop in the corporate tax rate to 30% from 35%, except for the oil sector; larger tax exemptions in the agricultural sector; and eligibility for a three-year corporate tax exemptions for tourism and hospitality firms that invest at least CFA300m (€450,000). Tourism firms may also benefit from a tax exemption on profits and income during the first five years of operation (upon the end of the construction period of the project).

In addition, under the Finance Law 2013, the government has maintained its commitment to improving its incentive framework for investment. Consequently, exemptions from duties and taxes on imports are provided within the following sectors:

• Tourism: businesses with investment of CFA800m (€1.2m) or more are exempted from duties and taxes on imports of capital goods;

• Timber: exemption from duties and taxes on imports of machinery, materials, capital goods and raw materials for wood-processing activities;

• Housing: exemption from duties and taxes on imports of machinery, materials and capital goods for authorised firms working in the social housing sector;

• Agriculture: exemption from duties and taxes on imports of machinery, capital goods, agricultural fertilisers, livestock feed and pesticides; and

• Sports: exemption from taxes and duties on donations received from abroad for sports federations. The agricultural sector is also supported under a new farm code and measures under the OHADA uniform act, which now offers a suitable framework for growers’ coops. These measures are encouraging but insufficient for increasing local firms’ competitiveness. There is still some work to be done, in particular to improve legal and fiscal frameworks for smaller firms, which are currently not up to facing certain economic challenges.

Apart from the tax framework, what reforms have been implemented in the legal field?

BERRE: The legal environment has not drastically improved as no fundamental reforms were implemented. For instance, we are still waiting for the new mining and hydrocarbons codes, as well as social reforms. While the government is actively seeking foreign investors, the rules on employing foreigners have not been amended. The overhaul of the social security code is not yet a priority. At the judicial level, Gabon adopted Law No. 003/2013 on June 25, 2013 to implement certain provisions of the uniform act related to arbitration, marking the government’s desire to develop an alternative justice system, especially for litigations involving foreign investors.

How can the implementation of an institute of chartered accountants reinforce investors’ confidence?

NICOLAS BALESME: Accountants belong to the family of “regulated professions”, the practice of which is subject to obtaining a degree, as well as a licence issued by CEMAC authorities, in order to operate in member countries, including Gabon. Until recently, Gabon did not have an institute of chartered accountants guaranteeing and ensuring professional ethics. However, since 2010 the Union des Experts-Comptables du Gabon (Union of Accountants of Gabon, UECG) was set up to regulate the accounting profession and prepare for the establishment of a professional order. Indeed, under its mandate auditors act as experts, and as such they now are liable in all their duties, which include business accounting, financial statements, audits and reviews. Hence, it is logical that they be supervised by such an institute, the role of which is to regulate the sector, establish rules of conduct and issue standards. The creation of the UECG will allow for the consolidation and harmonisation of this professional practice in Gabon, as well as being useful in regulating and protecting access to licences. This is a commitment to enforcing credibility among all actors in the sector for both local and foreign investors.