LIBREVILLE — Gabon has imposed a three-month freeze on all new tax and customs exemptions after revealing a cumulative revenue shortfall of over 1,000 billion CFA francs (≈ $1.75 billion) in the past three years linked to “massive and poorly regulated” incentives. The decision, announced at the Council of Ministers on 20 June 2025, is coupled with a comprehensive audit of all preferential regimes and a plan to tighten eligibility criteria around transparency, equity, and measurable economic impact.
The government’s breakdown attributes ≈ 682.7 billion CFA of the losses to domestic taxes and ≈ 376.6 billion CFA to border taxes, underscoring how exemptions have eroded both onshore collections and import-related revenues. Officials say the pause is “precautionary,” designed to stop the bleeding while an effectiveness review determines which incentives genuinely deliver investment, jobs, and export capacity—and which simply drain the treasury.
Notably, the clampdown on new exemptions sits alongside targeted cost-of-living relief. For six months, import duties and taxes on essential food products are suspended—but only for operators approved under the “Agrément Vie Chère”framework. In parallel, VAT has been suspended on the production and sale of select construction materials, a step intended to ease housing costs without reopening the wider door to broad, discretionary tax breaks. Subsequent ministerial orders in July further operationalised the freeze and began tightening sector-specific practices.
The move aligns with long-standing advice from international partners to curb discretionary exemptions and broaden the base, a recurring theme in recent surveillance and country diagnostics. It also comes as the authorities confront tighter fiscal space, lower oil revenues, and a large domestic-arrears overhang, prompting a wider program to restore credibility with suppliers and investors. In that context, rationalising incentives is as much about signal and governanceas it is about cash: predictable, codified rules lower the risk premium more than ad-hoc tax holidays ever could.
What to watch next: the audit’s findings and the redesign of eligibility criteria will determine which regimes survive and under what conditions (e.g., performance clauses, time limits, local-content and export benchmarks, and public reporting). Business groups should plan for more rule-based incentives—tied to clear metrics and automatic sunsets—rather than discretionary waivers. Importers benefiting from the temporary food-price measures should prepare for strict compliance checks under the Agrément Vie Chère approvals, while builders and materials producers should map the VAT suspension into pricing and contracts but budget for its expiry. If the government couples these measures with better publication of tax-expenditure data and parliamentary oversight, it could convert a short-term freeze into a durable, pro-investment tax framework.
