Observatoire d'Action Gouvernementale Project: Promotion of tax justice for public and private enterprises and capacity building of actors.
Phase 1: August 2018 - June 2019
It will be executed by the Observatory of Governmental Action (OAG) In its design, the project aims at justice and fairness in the payment of tax andvarious taxes; in this it aims at the occurrence of large public and private enterprises. Its target is therefore both at the central and local level. The project activities will extend to the local level through discussionsessions around the results ofanalyzes carried out upstream. For the OAG, stops will be organized in the province of Cibitoke (80 km from Bujumbura to the northwest). In relation to the nature of the project, this province is unique in that it hosts a large cement manufacturing company. Located on the one hand, on the border between Burundi and the DRC and, on the other hand, between Burundi and Rwanda, this province is also an important center of commercial influence.
This project is relevant in more ways than one, in the current Burundian context, marked in this case by a weak control of the ins andouts of taxes for certain taxpayers; a lack of tax revenue mobilization in relation to the actual or potential base; allegations of tax evasion, lack of transparency in the management of exemptions, allegations of corruption and mismanagement in some companies etc. ;
However, Burundi has put in place tax legislation that governs the collection of taxes and duties throughout the national territory. In recentyears, the country has also a single structure responsiblefor channeling taxes (Burundian Revenue Authority, OBR).
In addition, the Burundian authorities have already expressed, on several occasions, their desire to strengthen the sovereignty of the country through the full financing (100%) of the State budget. At this stage, the State will easilydo without external financial support, which is often accompanied by numerous conditionalities prejudicial to its sovereignty. In the short or long term, thisideal will only be attained ifand only if all legal and natural persons pay their tax obligations properly and regularly over the whole country.
Phase 2 July 2019 -December 2019
On August 13, 2018, the Observatory of Government Action, OAG, signed withthe NGO Oxfam Novib a financing agreement for the execution of a microproject on "Tax Justice".

One of the objectives of this project is to contribute to strengthening equality and fairness through taxation by promoting tax justice in Burundi. This project is based on four analyzes of (i) the Legal Tax Framework in Burundi; (ii) the inventory of exemptions, (iii) tax fraud and evasion in Burundi as well as (iv) mining companies and the tax authorities. These different analyzes have revealed many shortcomings hampering fair and equitable taxation in Burundi.

In addition, the various actors involved in the tax system have expressed the need to further the reflection and promotion activities of tax justice in Burundi so that the State and the taxpayerare, each in his case, gaining of the system in all legality and fairness. Among the concerns expressed is, in particular,the lack of clarity between the scope of action of the Burundian Revenue Agency and the municipality with regard to the levying oftaxes. Although there is a law relating to it, the taxpayer is often torn between the two institutions and there is a risk of double taxation / taxation.

This feeling of frustration was particularly noticeable in the province of Cibitoke where the OAGorganized reflection workshops on this theme in the light of its analyzes. Other questions concern the real weight of taxation on business performance in Burundi. Is the business environment really healthy and attractive in Burundi, as shown by the publications of the BusinessPromotion Agency in Burundi? Nothing is less sure.

In addition, some believe that the tax burden is a serious impediment to the momentum of investors. For when the corporate tax rate is higher, it reduces business investment to theextent that it decreases the after-tax return on investment.

Corporate income taxes weaken the incentive for companies to produce and create jobs. This analysis could inform both decision-makers and investors.

Other questions raise the equality andthe legality of the tax. On the one hand, some wonder if all people (moral / physical) are equal before the tax. On the other hand, taxpayers are numerous to question the legality of various taxes.

In order to help bring more light to these questions,the Observatory of Government Action (OAG) would like to extend the debate generated by the activities of the micro-project "Tax Justice" by implementing a series of other activities going into sense of promoting tax justice in Burundi.

Overall objective

Contribute to the strengthening of a legal, equal and fair tax system in Burundi

Specific objectives

- raise the awareness of the different actors on the importance of a legal and fair taxation in the increase of the tax base
- sensitize stakeholders on the impact of corporate performance through a legal and fair taxation.

Expected results

- The various actors are sensitized on the importance of a legal and fair taxation in the increase of the tax base
- The different actors are made aware of the impact of corporate performance through a legal and fair taxation.

Phase 3: On 1st March until 28th Feb2021

Context analysis

Any structured and organized democratic state must honor its commitments to its citizens. To achieve this, it resorts to taxes which allow it to meet collective needs by financing a whole variety of public services: transport, health, education, security, etc.

In reality, these are services which the State considers it necessary to render to all citizens in orderto enable them to enjoy their respective rights (right to education, health care, security, housing.

The state therefore needs to collect large amounts of tax from taxpayers, whether individuals or businesses.

In Burundi, some taxpayers still avoidthis civic duty to pay tax (tax evasion).

In August 2018, the Observatory of Government Action, OAG, signed, with the NGO Oxfam Novib, a financing agreement for the execution of a microproject dealing with "Tax Justice / Tax Justice".
One of the objectives of this project was to help strengthen tax equality and fairness through the promotion of tax justice in Burundi.
This project was based on four analyzes relating respectively to (i) the legal framework for taxes in Burundi; (ii) the inventory of exemptions, (iii) fraud and tax evasion in Burundi as well as (iv) mining companies and the taxman. These various analyzes have made it possible to detect numerous gaps handicapping a fair and equitable taxation in Burundi.

During the implementation ofthis project, the various actors involved in the tax system expressed the need to further reflect and promote tax justice activities in Burundi, based on the culture ofaccountability and gender sensitive in order to that the State and the taxpayer are, each as far as it is concerned, winner of the system in all legality and equity.
Among the concerns expressed is, in particular, the lack of clarity between the scope of action of the Burundian Revenue Office and the municipality with regard to the collection of taxes. Although there is a related law, the taxpayer often finds himself torn between the two institutions which sometimes hunt on the same land.

Thanks to funding from the NGO OXFAM Novib, OAG then continued to animate the debate through these analyzes:
- the State and the municipalities facing the tax authorities,
- the effect of taxes on the competitiveness of businesses
- the equality and legality of taxes in Burundi.
Today, based on the findings, lessons learned and recommendations from the various stakeholders, the OAG would like to continue with another phase of the project through "strengthening tax justice, based on the culture of accountability and gender-sensitive" in community level, in particular in Bujumbura town hall and in the neighboring commune of Mutimbuzi in Bujumbura province. The approach that will be used is that linked to the community participatory approach on justice, citizen participation and transparency in the allocation / management of tax revenue at the municipal level without forgetting gender-sensitive municipal budgeting.
A particular focus will be placed on taking into account the gender dimension in the allocation of revenue generated by taxes at the municipal level.
At this level, a study allowing themunicipal authorities to understand that for more equity and justice, gender must be taken into account in the allocation or management of tax revenues so that everyone can benefit from the fruit generated by taxes will be realized.
For morecredibilityin its recommendations, this study will show the current situation, gaps and proposed solutions. These are the results that will be shared within the framework of exchanges between local authorities and communities / taxpayers (The TOR will specify this).
It is in this document that the areas of advocacy and awareness raising will arise from the need to promote gender equality and take this imperative into account in all development strategies at the municipal, town / provincial / even national scale.