Bénin: new fiscal measures for 2026 approved unanimously

The National Assembly of Bénin has unanimously approved the amended finance law for 2026, marking a significant step in the country’s economic governance. The vote, held during a plenary session at the Palais des Gouverneurs in Porto-Novo, reflects broad political consensus on the revised budget, which has been increased by 8% to over 4,148 billion CFA francs, up from the initial 3,700 billion forecasted.

The revised budget prioritizes funding for newly created or restructured ministries, while reinforcing investments in social and productive sectors. Economic growth is projected to remain steady at 7.5%, aligning with the strong performance of the past decade. The overall budget deficit is set at 487 billion CFA francs, equivalent to 3.1% of GDP—a figure the government considers compliant with West African Economic and Monetary Union (WAEMU) commitments.

The capital expenditure reaches 1,572 billion CFA francs, an 8.5% increase compared to the initial forecast. Ordinary ministry expenses total 1,777 billion CFA francs, while the public sector employment cap remains unchanged at 102,740 full-time equivalents.

Key social measures in the revised budget

Social welfare remains a cornerstone of the new fiscal framework. The government has extended free secondary education for girls nationwide, expanded electricity and potable water access to health centers, and introduced free emergency care without upfront payments. Additional allocations target vulnerable early childhood development and support for children living on the streets, particularly in northern and border regions.

The agricultural sector benefits from 90 billion CFA francs in subsidies, reinforcing food security initiatives. These measures underscore the government’s commitment to inclusive growth and equitable resource distribution.

Modernizing the tax system

The amended law introduces structural tax reforms to enhance transparency and compliance. A key provision targets undistributed profits: companies failing to reinvest earnings within three years will face taxation. To encourage voluntary compliance, a reduced rate of 7.5% applies to past cases regularized before December 31, 2026; otherwise, the standard rate applies with penalties.

Digital platforms—including hosting services, online sales, and money transfers—now fall under withholding tax obligations for operators. Capital gains from the sale of shares in Bénin-based companies are taxable regardless of the seller’s residence. Tax audits for small businesses (CFA francs turnover under 2 billion) are shortened from three to two months, and digitalization of audit notices and procedural documents is now legally binding.

The National Assembly adopted a single amendment, proposed by Deputy Gérard Benoshi, to strengthen the coherence of digitalization provisions, which received the Ministry of Economy and Finance’s endorsement.

Streamlining special accounts and climate adaptation

The law rationalizes the Treasury’s special allocation accounts by abolishing three funds: the Financial Modernization Fund, the Arts and Culture Development Fund, and the Sports Development Fund. Their remaining balances will be consolidated into the general budget.

The Disaster Prevention and Management account has been renamed Disaster Prevention, Management, and Vulnerability and will be funded in 2026 by 56.2% of mobile telephony royalties. Climate adaptation and mitigation criteria are now integrated into the allocation of state financial support to local governments.

Consensus and recommendations from the Economic and Social Council

The Economic and Social Council (CES), consulted as per constitutional requirements, endorsed the budget while issuing 14 recommendations. The CES urges the government to set a plan for reducing the deficit to below 3% of GDP by 2027–2029, publish semi-annual public debt sustainability reports, implement geolocated digital tracking for agricultural subsidies, and conduct bi-annual budget execution reviews with the participation of the CES and the Court of Auditors.

Plenary debates were concise, with both the Republican Bloc and the Progressive Union for Renewal limiting their interventions to 15 minutes each. Lawmakers from both sides praised the continuity with the economic trajectory established under President Patrice Talon’s administration while stressing the need for rigorous spending oversight and social measure enforcement.

The Finance Commission submitted four key recommendations to the executive: prioritizing street children support in northern and border zones, clarifying and publicizing the free emergency care program, extending educational social measures to university works, and ensuring equitable distribution of investments across the country.