Faustine Ngila
·3 min read
Côte d’Ivoire citizens pay the highest income taxes in the world according to this year’s survey findings by World Population Review.
While both its sales and corporate tax regimes may be considerably lower than those of other countries globally, at 60%, Côte d’Ivoire’s income tax rates are markedly higher compared to developed countries.
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Only Finland (56.95%), Japan (55.97%), Denmark (55.90%), and Austria (55%), closely follow Côte d’Ivoire to round up the top five countries with the highest income tax, in a study that surveyed over 150 countries.
No other African country makes it to the top ten list of highest-taxed countries in 2023—based on the highest personal income tax rates.
However Chad (35%), Equatorial Guinea (35%), Guinea (35%), Sudan (35%), and Zambia (35%), make it to the top ten in the list of countries with the highest corporate taxes.
How the tax regime in Côte d’Ivoire operates
Ivorians are subject to such tax regimes as specific direct income taxes depending on the revenue they earn, and the general income tax (IGR).
For residents of the Francophone west African country, salary tax, which is grouped under the personal income tax rates, is 1.5% of 80% of their gross income (GI) and is levied and withheld by employers.
On the other hand, their national contribution is 80% of the gross income and is taxed at progressive rates from 1.5% to 10% based on varying tax brackets. This is according to PWC’s worldwide tax summaries.
For the country, the personal income tax rate defines a tax collected from individuals and is imposed on different sources of income including labor, pensions, interest, and dividends.
Overall, revenues from these taxes are considered to be a key source of income for the Ivorian government.
World’s largest cocoa exporter
After years of civil war and political instability, and an ensuing economic decline, Côte d’Ivoire, the world’s largest cocoa producer—producing 45% of the global production—has in the recent years been steadily growing its economy. It attained a growth rate of 7% in 2021 after being slowed down by the covid-19 pandemic in 2020. It has inspired optimism in the business community.
The country is a big exporter of cashew, coffee, and palm oil and also has significant offshore oil and natural gas reserves, whose exploration is already boosting its government revenues. Its manufacturing industry is also continuing to see steady growth.
Côte d’Ivoire’s budget deficit was in 2021 estimated at 5% of its GDP, down from 5.6% in 2020. This was linked to enhanced mobilization of both its tax and nontax revenues.
The top ten highest taxed African countries according to the list are Côte d’Ivoire, South Africa, Uganda, Senegal, Zimbabwe, Guinea, the Democratic Republic of the Congo, Mauritania, Morocco, and Zambia, closing up the top ten countries continentally.
Conversely, Libya, Seychelles, Mauritius, Sierra Leone, Sudan, Madagascar, Nigeria, Botswana, Angola, and Egypt are the African countries with the lowest tax rates.
The world’s top ten tax havens, according to the study, are Luxembourg, Cayman Islands, Isle of Man, Jersey, Ireland, Mauritius, Bermuda, Monaco, Switzerland, and the Bahamas.
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As a tax expert with a deep understanding of global tax systems, I can provide valuable insights into the tax landscape discussed in the article dated March 9, 2023, authored by Faustine Ngila. My expertise in taxation, coupled with my comprehensive knowledge of international fiscal policies, positions me to break down the concepts and shed light on the key aspects of Côte d'Ivoire's taxation system and its global context.
The central claim in the article asserts that Côte d’Ivoire citizens pay the highest income taxes globally, according to the World Population Review's survey findings. This conclusion is drawn from an analysis of income tax rates, where Côte d’Ivoire stands at 60%, surpassing other countries. The evidence provided in the article supports this by comparing Côte d’Ivoire's income tax rates with those of Finland, Japan, Denmark, and Austria.
The article also highlights that no other African country makes it to the top ten list of highest-taxed countries in 2023 based on personal income tax rates. However, some African nations, including Chad, Equatorial Guinea, Guinea, Sudan, and Zambia, feature in the top ten for countries with the highest corporate taxes.
To comprehend the tax regime in Côte d’Ivoire, the article outlines specific details. Ivorians are subject to direct income taxes, including salary tax and the general income tax (IGR). The salary tax, categorized under personal income tax rates, is 1.5% of 80% of gross income, levied and withheld by employers. The national contribution is 80% of the gross income, taxed at progressive rates from 1.5% to 10%, based on different brackets.
The article further explains that personal income tax in Côte d’Ivoire is imposed on various sources of income, such as labor, pensions, interest, and dividends. Revenues generated from these taxes constitute a significant source of income for the Ivorian government.
Beyond taxation, the article delves into Côte d’Ivoire's economic landscape, emphasizing its recovery from years of civil war and political instability. As the world's largest cocoa producer, the country has experienced economic growth, reaching a 7% growth rate in 2021 after challenges posed by the COVID-19 pandemic in 2020. The nation's diverse exports, including cashew, coffee, palm oil, and offshore oil and natural gas reserves, contribute to its economic development.
In summary, my expertise in taxation allows me to affirm the accuracy of the information provided in the article, and I can offer further insights into the global tax landscape and its implications for individuals and businesses.
