BURKINA FASO,S TRADE UNIONS PROTEST COMMUNAL TAX,

UNCLAS OUAGADOUGOU 000124



SIPDIS

E.O. 12958: N/A
TAGS: ECON ELAB PREL PGOV UV
SUBJECT: BURKINA FASO,S TRADE UNIONS PROTEST COMMUNAL TAX,
TO STAGE STRIKE AND HOLD DEMONSTRATIONS ON FEBRUARY 24.


1. SUMMARY: Trade unions and independent syndicates have
called for a nationwide strikes and demonstrations on
February 24th to protest the application of a so-called
"Communal Development Tax." Unions believe that this tax is
unfair, unpopular and anti-social, and insist that the
government repeal it. The government says it needs this
additional income to assist with various development projects
in rural areas and to speed up decentralization. The
protests, which are authorized by the local government, are
expected to be peaceful. END SUMMARY.


2. In 1994, the government lifted the registration tax for
cars and motorcycles. While this measure was very popular it
cost the government significant loss of revenue. As a
result, the government has decided to remedy this, at least
in part, by calling for communal tax on vehicles. The
Communal Development Tax (Taxe de Development Communal or
TDC),established by the 2008 Finance law, was not
immediately implemented by the government because of a
hostile social climate principally linked to steep
cost-of-living increases and high staple food prices. This
year however the government announced that it would implement
the TDC and that any person not paying the tax would have
his/her vehicle impounded on the spot. The tax will become
effective on March 31st 2010 for all vehicles currently
registered, and one month after the purchase of any other
vehicle.



3. How much does the communal tax represent and where will it
go?
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The level of taxation is determined by one of three factors,
horsepower, weight or cylinders:

-- Category one: the horsepower on tractors, mini-vans and
cars
8 CV about $15 / 9-15 CV about $20 / 16-20 CV about $40 /
More than 20 CV: about $60

-- Category two: the weight of trucks (and cargo)
Less then 2.5 metric tons about $40 / 2.5-5 tons about $60 /
more than 50 tons about $100

-- Category three: the cylinders of two or three-wheeled
vehicles.
50 m2 about $2 / 51-125 m2 about $4 / 126-300 m2 about $10 /
more than 300 M2 about $15

Government authorities have announced that 40 percent of the
taxes levied by the TDC will go directly to the region
("commune") where the vehicle is registered and where the tax
is paid, the remaining 60 percent will be deposited into a
common "solidarity account" to be redistributed across
Burkina Faso. The aim is to accelerate and reinforce
decentralization by allowing regions to manage their own
budgets.


4. The trade unions are opposed to this tax for three major
reasons including; it represents a double tax on the same
product; perceived unfairness; and a continued decrease in
the overall standard of living. The unions believe that a
1994 single tax on petroleum products (Taxe Unique sur les
Produits Petroliers or TUPP) already covers most of what
the Communal Development Tax proposes to do. The feeling is
that this is an unfair double tax. The anti-tax proponents
also believe that this tax will affect poor populations much
more so then the affluent ones who can easily absorb an
addition imposition. Finally the standard of living across
Burkina Faso is still very low, and so any additional tax,
according to the unions, will hurt people financially and
potentially deprive them of income for other basic or
important needs.


5. The organizers of the strike applied for a demonstration
permit. Town halls of the various cities within which the
protests are to occur have granted a "license/authorization"
for protest. The protests, scheduled to last about four hours
(0800-1200),are expected to be orderly and peaceful.
National unions and civil society organizations will
participate. To ensure protester security and to make sure
the march remains calm, police will be present and will block
roads in and around the protest route.
LAEUCHLI