The feud between Ouagadougou and Paris now affects the economic interests of both parties.
In a note dated Monday, August 7 and stamped “confidential”, according to an international media report, the Burkinabe Ministry of Foreign Affairs informed the French side of the end of the tax advantages granted to it.
“The government denounces the double taxation agreement signed on August 11, 1965 between Burkina Faso and the French Republic, which entered into force on February 15, 1967, including its amendment signed on June 3, 1971, which entered into force on October 1, 1974,” reads the press release signed by the head of Burkina Faso’s diplomatic service, Olivia Rouamba.
She explained that “this denunciation is the consequence of the refusal” of the French to renegotiate the details of the agreement.
In January 2020 and at the end of 2021, Burkina Faso submitted requests to negotiate the 1965 tax convention, but France had “remained silent.”
For the Minister of Foreign Affairs, the transitional government has no choice but to terminate the treaty.
She specified that “the present denunciation will take effect within three (03) months of receipt of this notification.”
A “huge blow” for France
Phillipe Traoré, a tax expert from Burkina Faso, explained that the double taxation treaty, among other things, allows individuals and companies to avoid paying taxes on the same income in two different countries.
He believes that this measure is “very serious for French multinationals” established in Burkina Faso, adding that “all French income derived from activities carried out on Burkinabe soil will now be taxed.”
“In fact, with the convention signed, the Burkinabè did not deduct any withholding tax on income from services provided by French people (individuals and/or companies) in Burkina,” he said.
The tax expert pointed out that French companies, in particular, are exempt from many taxes in Burkina by virtue of the double taxation treaty.
In his opinion, this gives them a competitive advantage over all other companies operating in Burkina Faso.
“It is a real blow for France and a financial windfall for Burkina,” insisted Phillipe Traoré.
This denunciation comes 48 hours after France suspended all development aid and budgetary support to Burkina following the support given by the Burkinabe military junta to the National Committee for the Defence of the Homeland (CNSP), which overthrew Mohamed Bazoum in Niger on July 26.
