Thursday, 20 August 2015

Helping the Burundian hotel and restaurant sectors to recover - a clarification

My last post discussed tax suspension for the hotel and restaurant sector in Burundi.  I should clarify one point on taxes at the moment.  Many Burundian companies will be losing money and may be entitled to carry these losses over to future years, to offset their tax liabilities when they return to profit.  Suspension of income tax can actually be costly to them.  It is the same reason why income tax breaks for new companies can be disadvantageous to them.

Burundian companies would be more likely to benefit from suspension of taxes that are always positive in every year, like taxes on property ownership, particularly if they are very complicated to administer relative to the size of revenue collected.  They would also benefit from simplification of tax administration.  The idea is to reduce the amount of company expenses at a time when there is little income coming in to them.

Better still would be restoration of peace and hence demand.

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