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Investment incentives in Zaire (anglais)

Since September 1983, the Zairian government has made a number of basic economic and financial reforms to liberalize the economy and to facilitate growth and development. Two proposals, including reform of the Investment Code and revaluation of assets, are being considered as further incentives to encourage new investments. The Investment Code offers a series of tax concessions to domestic and foreign investors. Benefits under the Code consist of uncontrolled and unmeasured off-budget subsidies which have been disproportionately awarded to encourage investments in declining sectors. It is recommended that the Code be replaced by broad-based automatic incentives, administered through the tax code. Zaire has permitted revaluation of assets to account for inflation on three occasions. The revaluations permitted firms to increase the book value of assets, thereby increasing depreciation allowances and reducing taxes. The system is asymmetric, as it adjusts the book value of assets but not liabilities. Firms which lose depreciation allowances to high inflation may have net gains if their liabilities are denominated at fixed levels. Further, the system, due to its retrospective nature, provides virtually no incentive for new investment.

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