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Chad’s Tax Administration: A Hubris of Corruption

Chad’s tax administration is notorious for its corrupt practices, with companies reporting that bribes are commonplace in connection with annual tax payments. According to a recent survey by the Global Competitiveness Report 2015-2016, businesses spend an average of 732 hours per year on filing, preparing and paying taxes, which is equivalent to a staggering 63.5% of their profits.

A Complex and Costly Tax System

The tax system in Chad is complex and costly for businesses to navigate. With a total tax rate of 63.5%, companies are forced to dedicate significant resources to comply with the tax laws. Furthermore, the clearance process at the border is inefficient, and the lack of transparency at customs administration is a major competitive disadvantage.

Customs Administration: A Hotbed of Corruption

The Chadian customs administration is plagued by corruption, with irregular payments being exchanged when importing and exporting goods. Truckers report encountering 20 illicit control posts along the road, where they are asked to pay bribes of CFA 5,000 to CFA 10,000 in addition to a tax of CFA 46,000.

Public Procurement: A Cauldron of Corruption

Public procurement is another area rife with corruption. Companies have reported encountering irregular payments or bribes in connection with the awarding of public contracts or licenses. Evidence suggests that officials involved in the tendering process are required to pass on envelopes with bribes, extracted from business executives who were awarded the public contracts.

Natural Resources: A Seedbed of Corruption

The extraction of natural resources, particularly oil, is a significant part of Chad’s economy. However, secrecy around oil deals with companies and the government has created a high risk of corruption and mismanagement. In one instance, a Canadian judge fined Griffiths $1 million for violating anti-corruption laws.

Lack of Protection for Whistleblowers

Chad lacks effective mechanisms to protect whistleblowers, who frequently face intimidation and harassment. The culture of impunity affects those accusing others of corruption, and anti-corruption prosecutions are often used as a tool to eliminate political opposition.

Limited Civil Society Participation

Civil society participation is limited in Chad, with most media outlets controlled by the state. Journalists, high-profile persons or religious leaders speaking out about corruption experience harsh consequences. The state also limits anti-corruption efforts, and local NGOs that focus on monitoring corruption face significant challenges.

Conclusion

Chad’s tax administration is a hub of corruption, with companies facing numerous obstacles when trying to comply with the tax laws. The customs administration and public procurement processes are also plagued by corruption, while natural resources extraction creates a high risk of corruption and mismanagement. The lack of protection for whistleblowers and limited civil society participation only exacerbates the problem. It is imperative that the government takes concrete steps to address these issues and create a more transparent and accountable system.