Workshop on the fisheries sector tax system and its role as a management tool: mauritania

by
Chérif Ould Toueileb^[1]

Plan

• A few facts about the physical environment, resources, the importance of the sector on the country's economy.

• Mauritanian macroeconomic and sectorial policy.

• The role of the tax system on fishery management in Mauritania: regulation system and access to resources.

• Assessment and prospects.

Physical environment

• 720 km of shoreline;

• Permanent upwelling;

• 234 000 km² of Exclusive Economic Zone (EEZ);

• Wide continental shelf and a very large zone of shallow waters: Banc d'Arguin;

• The largest AMP in Africa (60% of the coastal zone);

• Completely unpolluted zone.

Resources

• Great species diversity;

• Great commercial value (70 species exported);

• Annual potential catch: 1,5 to 1,7 tonnes;

  • Demersal resources are fully to overexploited (octopus);

  • Major potential in pelagic resources, possible controlled development/shared stocks;

  • Unexploited clam stock of 300 000 tonnes;

  • Catches in the range of 600 000 tonnes/year;

  • Industrial fishing: 90%;

  • Artisanal and coastal fishing: 10%.

Economic importance

• 40% of revenue in foreign currency (second sector after mines);

• 20 to 25% of State budgetary revenue;

• 10% of Gross National Product (GNP);

• 30 000 jobs of which 36% are modern sector jobs;

• Consumption 4,3 kg/per capita/year;

• Export > 95% of catch. Only 10% of exported products are processed.

Fishery policy within the Centre de recherches sur les politiques économiques (CSLP) macroeconomy framework

• Sustainable optimization of economic income from the sector.

• As for industrial fishing, the long-term strategy is to ensure that fishing products are processed on national soil.

• As for traditional and coastal fishing, controlled development is to be ensured within a decennial development plan.

1998 Fishing policy

• Sustainable resource management.

• Increased economic sector integration.

• Strengthening of institutional capacity.

• Environmental preservation and maritime security.

The tax system as a management tool
Three tax system levels, viz.:

• Direct "common" taxing on firms' profits (corporation tax on BIC, IMF).

• Indirect taxing: fishing sector will be submitted to "régime des points francs " (New Investment Codes).

• Specific taxing system for fishery management: access to resource regulations in order to solve the problem of free and no charge entry, i.e. recovering of licence fees, fisheries management and management of fishery income.

Income management

• Income management is closely linked to the fishery reform policy.

• Income management (CA - CT), 3 possibilities:

  • Distribution (free and no charge access);

  • Capitalization (within or outside the sector);

  • Recovering? (based on turnover and cost parameters) this will be developped in the presentation of the Mauritanian example.

From 1984 to 1995: access regulation system based on:

• Landing in Mauritania and a catch control on demersal fishing.

• Marketing monopoly by a State company: the SMCP.

• An export tax (called Droit de pêche) proportional to a fraction of the turnover on exportations (12%).

Taxation on turnover.

The role of the tax system in public fishery resources management policies in Mauritania.

From 1996 to 2003: regulation system based on:

• Fishing licences (access rights).

• Taxation on capacity elements: Gross register tonnage (GRT) for industrial fishery, length of boats for artisanal fishery.

• + A freezing of industrial fishing effort since 1998.

Taxation on capacity elements.

Strengths and weaknesses of current system.

The role of the tax system in public fishery resources management policies in Mauritania.

A few findings on the expert study carried out

• Steady decline in number of taxes collected (1.9 million UM in 2000 as opposed to 3.4 million in 1997).

• Missed earnings for the State estimated at 714 million UM in 2000 (in comparison to keeping the old system).

• A decrease in the fisheries' relative importance on budgetary resources and a change in the contribution structure (access rights only counted for 2.3% of the Government budget in 2000, as opposed to 16% for export tax in 1996).

Development of comparative results of both systems

• Difficult because:

  • other concurrent changes have intervened (decline in octopus stock, plus European Union fishing agreement);

  • the second system, as it was designed, does not work (access rights are not recovered as artisanal fishing is exempt from the 2% IMF corporate tax and access fees and rates of annual taxes are not updated).

Findings on the sector's situation

• Fish stocks are fully to overexploited for octopus (excess fishing effort on octopus by 25% in 1998, 30% in 2002).

• National fishing companies in poor situation (especially the industrial segment: 215 national trawlers in 1996, 125 in 2000).

Current comments and future prospects

• The 2002 expertize on the sector's tax system reform recommends:

  • Annual up-dating of taxes as planned originally;

  • Introduction of elements linked to production and its value in fee calculation (collected at customs level).

• Study on the role of the tax system within the framework of the octopus management plan.