Expat taxes in Mali – that will be the topic of today’s article.
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The Republic of Mali is a landlocked state in West Africa. It borders in the west with Senegal, in the north – with Mauritania and Algeria, in the east – with Niger, in the southeast – with Burkina Faso, in the south – with Cote d’Ivoire and Guinea.
The northeastern part of the Republic of Mali is controlled by Islamists from the Al-Qaeda-affiliated group Ansar al-Din, previously the unrecognized Independent State of Azawad was proclaimed here, the authorities of which, after losing control over this territory, announced the transition to the idea of regional autonomy. It shares borders with seven African countries at once: Senegal, Mauritania, Algeria, Nigeria, Burkina Faso, Cote d’Ivoire, and Guinea.
The population of the country is about 15 million people and is growing at a fast pace: the birth rate in Mali is much higher than the death rate.
Despite the fact that 90% of Mali’s population is Sunni Muslim, the country is officially considered a secular Muslim state. 5% are Christians and another 5% are adherents of various African beliefs.
The number of Mali’s armed forces is approximately 7,500.
Mali is Africa’s third-largest gold producer and the largest cotton exporter in the region. Moreover, it is one of the poorest countries in the world.
80% of the working population is engaged in agriculture, 36% live below the poverty line. Mali is highly dependent on foreign aid.
Who is fighting for power in Mali?
France took the most active part in the fight against Islamists in Mali in 2013
In addition to the official government in Mali, there are two other forces that influence the territorial and political structure of the country.
One of them is represented by the Tuaregs – a people who profess the Sunni teachings of Islam but have preserved many pre-Islamic traditions. For example, elements of matriarchy are traced in the Tuareg lifestyle. Women are highly respected and have the same voice in the family as men. Girls are taught literacy and elementary science from childhood, while illiteracy is allowed among boys. Despite the fact that polygamy is officially allowed, in practice, Tuaregs adhere to monogamous marriages.
In Mali, the Tuaregs are fighting for the independence of Azavad, a territory in the north of the country populated mainly by this ethnic group. The Tuareg rebels formed the National Movement for the Liberation of Azawad (MNLA) and offer every possible resistance to the Mali army, not disdaining such methods of struggle as hostage-taking and armed sabotage.
Northern Mali has been engulfed in a Tuareg uprising since January 2012. The number of armed rebels was estimated at about 2 thousand people.
In March 2012, a military coup took place in Mali. The work of state institutions was paralyzed and the constitution was suspended.
The military who came to power claimed that the government they ousted refused to give the army sufficient powers to suppress the Tuareg uprising.
However, the coup had the opposite effect. Taking advantage of the country’s political vacuum, in just a few days, Tuareg militias invaded northern Mali, including the World Heritage city of Timbuktu.
Already on April 6, the rebels proclaimed the Independent State of Azavad, appealed to the international community with a request to recognize its independence, and announced a unilateral ceasefire.
However, here a second force entered the scene – the Islamists, who came into conflict with the Tuaregs.
In June, armed clashes broke out between them, and after a couple of weeks, the radical group Ansar al-Din established control over the cities of Gao and Timbuktu.
The relationship of the central government with these two forces is fundamentally different: the fight against the Islamists is fought to the point of complete annihilation, and the negotiation process has been established with the Tuareg rebels.
Economy of the Republic of Mali
Mali is one of the poorest countries in the world. Its gross domestic product is US $ 926 per capita (2018). About 10% of the population is nomadic, and 80% of the workforce is employed in agriculture or fishing. In addition, some women live off pottery. 65% of the land is desert and semi-desert, so agriculture is largely limited to the vicinity of the Niger River. Mali’s economy is dependent on foreign aid and world market prices for cotton.
In 2006, cotton, gold and cattle accounted for 80-90% of Mali’s export earnings. Agriculture is focused on self-sufficiency in cereals (millet, sorghum and corn).
For example, dried fish is exported from Mali to other West African countries such as Burkina Faso, Côte d’Ivoire and Ghana. Malian cotton is exported mainly to Switzerland.
There is little industry in the country, and it is mainly focused on the production of salt, as well as the footwear and textile industries. The expenses are almost double the income. Mali was approved by the International Monetary Fund in 1999 for the Heavily Indebted Poor Countries (HIPC) program. It uses funds that will go to reduce external debt to reduce poverty.
Mali’s currency is the CFA franc, which is also the currency of thirteen other countries in West and Central Africa. The currency is currently pegged to the euro. Mali’s most important trading partners are Cote d’Ivoire, Senegal, China and the countries of the European Union. In 1994 Mali was one of the founding members of the West African Economic and Monetary Union.
Health level in Mali
Life expectancy in Mali in 2015 is estimated at around 55 years. Men have slightly less than women. According to a 2015 WHO summary, infant mortality is very high: 11.5% of Malian children die before the age of 5. According to 2013 estimates, 0.86% of the population is infected with HIV. The average age is 16 years. In 2015, the literate population was estimated at 38.7% of people over 15 years old. Men have a higher literacy rate (48.2%) than women (29.2%). In the context of the Ebola epidemic in West Africa in 2014, the country identified sporadic Ebola cases involving a man traveling from Guinea to Mali.
The official language of Mali is French, which is used in administration, at school and as a link between the ethnic groups of the country. Most of the inhabitants speak Bambara. It is also used as the language of administration and the media. Bambara is understood by about 80% of Mali’s population.
Ethnologue recognizes 66 languages spoken in Mali, 62 of which are native to the region and four from elsewhere. Six of them are considered endangered. Most of the languages belong to the Nigerian-Congolese language group. Writing exists only in Arabic and Tuareg, but more recently writing systems have been developed for other languages as well.
According to the 2009 census, Bambara is spoken by 46.3% of the country’s population (62.9% in cities), Fulbe – 9.4%, Dogonia – 7.2%, Soninka – 6.4%, Mandinka and Songhai – 5. 6%, Minyanka 4.3%, Tuareg Tamishekia 3.5%, Senufo 2.6%, Bobon 2.1%, Bozoa 1.9%, Hassonkaa 1.2% and Mauritanian 1.1%.
Education in Mali
Already in the 12th century, more than 25,000 students from different countries studied at the Sankore University, located next to the Sankore Mosque in Timbuktu. Sankore University also continues to operate.
The first schools in the modern sense were created by the French colonialists, and the first students were the children of the Malian leaders who were captured, such schools were called “Schools of the sons of the leaders.”
At the beginning of the 20th century, the French administration made great efforts to spread primary and secondary education in Mali, education was conducted entirely in French. Since independence, the number of literate people has steadily increased, despite the fact that before independence, only 7% of children attended school. Centers for the elimination of illiteracy for adults were established.
According to the 2009 census, 27.7% (19.8% of women) are literate over 15 years of age.
The school system includes a six-year elementary school and a six-year gymnasium, divided into two levels. At a higher level, students can choose between a two- or three-year technical school or a four-year vocational school. Education is free for children 7-16 years old. It is also required by law, but not everyone goes to school. In 2009, 68.4% of children of primary school age attended school (65.0% girls). Teaching is conducted mainly in French.
The University of Mali (since 2006 Bamako University) was founded in 1993. About 80,000 students entered it in the 2010-2011 academic year. In order to accommodate the growing number of students in 2011, the university was divided into four campuses: the University of Science, Technology and Technology in Bamako, the University of Arts and Humanities in Bamako, the University of Social Sciences and Management in Bamako and the University of Law and Political Science in Bamako.
In 2009, the University of Segou was established. Other colleges include the College of Administration, founded in 1958, the Katibugu Agricultural School, the Graduate School of Education for Secondary Teachers, and the Abderhaman Baba Toure Technical College. The first regional university was founded in Segu in 2012.
Tax system in Mali
In this article we will talk about all the possible taxes in Mali, that have to pay both non-residents and residents.
The category of taxable industrial and commercial profits includes profits from commercial, industrial, handicraft activities, professions, officials and officials, as well as all profitable activities that are not subject to special taxation. This category also includes remuneration allocated in the form of fees to any professional, including on an ad hoc basis, outside of any company, engineering firm or other firm that regularly registers with the tax authorities.
Tax base and regime
Taxes are being paid on the income earned in Mali by legal entities that carry out activities there, despite their legal status or the duration of the operations carried out, taking into account non-tax legislation. There are two regimes for taxing industrial and commercial profits:
- A synthetic tax regime applicable to companies with an annual turnover of less than 50,000,000 XOF tax-free, including companies with multiple enterprises
- The regime of actual profit, which applies to:
- taxpayers whose annual turnover is greater than or equal to:
- 50,000,000 XOF without taxes;
- tax advisors, approved accountants and approved chartered accountants and companies approved under the investment code;
- any individual usually responsible for a synthetic tax, but opting for the de facto tax regime.
In turn, the effective profit regime includes two tax regimes:
- a lighter and effective regime for taxpayers who has a turnover greater than or equal to 50,000,000 XOF, but less than or equal to 250,000,000 XOF;
- the standard actual regime for all other taxpayers who cannot receive benefits from a synthetic tax or a simplified regime.
Profits that are both resident and non-resident are tax-deductible
This is the profit earned by the companies operating in the shopping center and those where taxation applies to the shopping center in accordance with an international double taxation treaty.
It is believed that the shopping center employs:
- companies with headquarters or actual place of management in Mali;
- companies incorporated elsewhere and having a permanent establishment in Mali. The term “permanent establishment” means a permanent place of business through which the activities of an enterprise are carried out in whole or in part.
Profits earned by companies are also taxed in Mali if they carry out activities that constitute a full commercial cycle in the country. The withholding tax applies to industrial and commercial profits, as well as amounts or income paid to compensate for economic activities carried out by parties that do not have a permanent professional office in the shopping center.
These amounts or income include, inter alia:
- remuneration paid to professionals and officers or officers;
- public contracts, regardless of their object.
The taxable amount is determined by applying a standard deduction of 50% to gross revenues and 90% to expenses, depending on the type of service or contract.
Frequency and Declaration
Tax Is established annually on the profit received in the previous year. The reporting year usually coincides with the calendar year.
Companies must declare the amount of their taxable profits for the previous year or fiscal year no later than:
- March 31st of each year for those paying synthetic tax;
- April 30 of the year following the end of the reporting year, for taxpayers based on actual profit. If the transaction is causing a loss, the loss is declared at the same time.
Tax paid by taxpayers under the standard effective income regime is payable in three installments during the last 15 days of March, July, and November.
Capital gains on disposal of property, plant, and equipment during operation are deducted from taxable profit if the taxpayer has committed to reinvest an amount equal to the capital gains added to the cost of assets disposed of in property, plant, and equipment over 3 years. in companies located in one or more of the UEMOA member countries.
Capital gains from the sale of long-term equity interests by holding companies in accordance with national legislation are excluded if the portfolio of these companies consists of at least 60% of holding companies in companies with registered offices in one of the member states of the West African Monetary and Economic Union.
Capital gains, other than income from the sale of goods, resulting from the distribution of shares (property rights) after the merger of joint-stock companies, are exempt from industrial and commercial income tax or corporate income tax.
Personal income tax
Individuals who are employees are subject to payroll tax (ITS) on all amounts paid during the year by public and private employers, directly or through others in exchange for or in connection with work.
Residence and non-residency
Payroll tax is subject to:
- those who usually reside in Mali and are engaged in a paid activity or receive taxable income in the country;
- persons residing or residing outside Mali under certain conditions;
- some groups who are on vacation outside Mali;
- government employees or government employees in foreign countries, if they are exempt from a similar tax.
The income below is subject to payroll tax regardless of its name or form:
- salaries, allowances, earnings, commissions, profit sharing, bonuses, rewards, wages, tips and other remuneration;
- pensions and life annuities;
- remuneration through the distribution of shares among senior managers.
Base and applicable rates
The tax base and taxable income vary depending on the type of financial income. IRVM rates are as follows depending on the type of tax:
- Tax rate Interest on bonds of Malian companies – 0%, 3% and 6%
- Shares paid to creditors and bondholders – 6%
- Interest on demand deposits, time deposits or current accounts – 9%
- Dividends – 7% and 10%,
- Interest, arrears and other income on bonds, market securities with a representative or head office in Mali – 13% Payments to creditors and bondholders 15%
- All other income from securities 18%
Income tax on land
Income from buildings made of brick, steel or wood permanently anchored or supported on special foundations, excluding income included in the company’s profits subject to corporate tax.
Non-leasehold property occupied by the owner, his employees and buildings that are part of the corporate balance sheet assets of a company and public railways are exempt from tax.
- The tax rate on income from land is set as follows:
- 12% for permanent and semi-permanent buildings%;
- 8% for mud brick buildings.
Discounts and rates
Payroll tax is based on all remuneration, salary or income, including payments in kind, bonuses and other allowances, excluding those that are reimbursement of expenses. The rates applicable to taxable income are set for each income category as follows:
West African CFA franc:
- 0 – 330,000 – 0%
- 330,001 – 578,400 – 5%
- 578 401 – 1 176 400 – 12%
- 1 176 401 – 1 789 733 – 18%
- 1,789,734 – 2,384,195 – 26%
- 2,384,196 – 3,494,130 – 31%
- 3 494 131 – and more – 37%
The reduction in family fees applicable to gross tax is obtained as follows:
- married with no dependent children: 10%
- per dependent child up to and including the 10th: 2.5%
- Disabled children are entitled to a tax deduction of 10% as a taxpayer.
In Mali, there are no taxes on the following:
- Social security taxes
- Expatriate taxes
- Stock option taxes
- Association and partnership taxes
- Pension taxes
- Wealth taxes
- Gift and inheritance taxes
- Foreign income taxes
Operations relating to economic activity involving the delivery of goods and services in Mali for a consideration by a taxable party are liable for VAT. The following are liable for VAT as of right, when they achieve turnover exclusive of taxes equal to or above XOF 50,000,000:
- those who sell products they have imported or bought In the local mar- ket as they are;
- those who sell new buildings;
- building work contractors;
- water, electricity, gas and telecommunications suppliers;
- service providers.
The same applies to importers, regardless of their turnover.
Here it was all the information about the tax system in Mali, and the general profile of the country including the health system, education, and other sectors. Many expats can be interested in moil to Mali and its unique cities. Openly speaking, Mali has many advantages in the tax system for individuals which can definitely be great and there are a lot of sectors where no taxes are applied.
If you are interested in Mali, note that finding a good job can be enough challenging, so move there in cases where you already have your remote job or you are starting your new business there.
If you have any questions, contact us, and we will help you.