Benin: Finance Law 2026 - Key Tax Measures, VAT Changes and Targeted Incentives

Benin's tax news focuses on new tax measures planned for 2026. These measures relate to:

1. Changes to Value Added Tax (VAT) deduction rules (fuel costs/inputs).

The following are affected by the changes to VAT deduction rules on fuel and inputs:

• For businesses (particularly construction and industry): VAT deductions on fuel costs, petroleum products for tanks, gas for factories, etc., are now more restrictive.
• For construction companies, the deduction is capped at 90% of the VAT shown on the purchase invoice.

2. VAT Refund Applications

The new regulations regarding VAT refund applications, contained in paragraph 1 of Article 254 of the General Tax Code, allow businesses to regularize their VAT credit refund applications until April 30 of the following year.

3. Tax Relief/Targeted Exemptions Maintained or Enhanced

• Exemption from duties and taxes for new equipment imported by Small and Medium-Sized Enterprises not subject to a special regime.
• Exemption for new or local equipment and materials intended for the construction or renovation of service stations, on-street stations, and oil tanks (diesel).
• Exemption or reductions for the importation of new vehicles.
• Reduction of the Statistical Tax on the Re-export of Petroleum Products and the Transit of Raw Materials – the rate is reduced from 5% to 1%.
• Waiver of late payment penalties for taxpayers liable for the single property tax if they pay the debt in full.
• Waiver of penalties for certain taxpayers in the informal sector who voluntarily declare their past activities.

Overall, the new measures in the 2026 Finance Law aim to support SMEs, facilitate private investment, encourage the renewal of the vehicle fleet and industrial equipment, and support the structural transformation of the economy through industry, construction, and services.