Tax collection
Tax compliance leaves much to be desired! According to statistics from the General Directorate of Taxes (DGI) in Madagascar, the local tax collection rate for municipalities hovers around 20 percent, in contrast to rural municipalities such as Anosizato Ouest, which manage to achieve a high rate of up to 90 percent. In the Urban Municipality of Antananarivo (CUA), 60% of city residents are failing to meet their tax obligations. “This reluctance stems from the fact that they see very little accountability on the part of the state and decentralized local governments,” explains an expert in local taxation. Educated individuals with a higher standard of living are less likely to fulfill their tax obligations than those from vulnerable social groups, who rely more heavily on public services than the former.
Taxation in Madagascar: Awareness Campaign Launched by the DGI
In response to this serious situation, the DGI is launching a broad taxpayer awareness campaign with technical support from the Inclusive Municipal Development and Decentralization Project (ProDéCID/GIZ) of German Cooperation. To begin with, 16 municipalities in the Analamanga region are being targeted. This campaign follows taxpayer registration activities (identification and surveys) that have been conducted since 2016. The focus is now on raising awareness in the municipalities in question, including: Ambohidratrimo, Anosiala, Ivato, Itaosy, Andranonahoatra, West Anosizato, Andoharanofotsy, Alasora, Bongatsara, Ambohimangakely, Sabotsy Namehana, Merimandroso, Manjakandriana, Mantasoa, Talata Volonondry.
Raising Awareness to change mindsets
According to the tax expert, there is a clear commitment to improving the state of local taxation, both on the part of the decentralized local governments and the central government.
All that remains is to convince taxpayers to better fulfill their tax obligations by adopting a more effective strategy, the expert adds. It is more effective to raise awareness among the public about the necessity of paying taxes in Madagascar. The goal is to encourage them to comply voluntarily, without necessarily resorting to coercive measures.
As for entrepreneurs who do not pay their taxes, the most effective approach would be to make them aware of their duty as citizens and as contributors to the country’s development, thereby encouraging them to pay their taxes. Ultimately, the goal is to ensure that entrepreneurs decide on their own to pay their taxes and that tax harassment becomes nothing more than a bad memory once they are aware of their responsibility.
As for entrepreneurs who do not pay their taxes, the most effective approach would be to raise their awareness of their duty as citizens and as contributors to the country’s development, thereby encouraging them to pay their taxes. Ultimately, the goal is to ensure that entrepreneurs decide on their own to pay their taxes and that tax harassment becomes nothing more than a bad memory once they are aware of their responsibility.
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