Bénin 2026: key changes after revised finance law approval

The National Assembly of Bénin has unanimously approved the revised 2026 finance law during a plenary session at the Governors’ Palace in Porto-Novo. The revised budget, now 8% higher than initially projected, reaches over 4,148 billion FCFA, up from the 3,700 billion FCFA outlined in the original budget proposal.

This collective budgetary adjustment, implemented early in President Romuald Wadagni’s term, reflects the government’s priorities. It aims to equip newly created or restructured ministries with the necessary resources while intensifying investments in social and productive sectors. Economic growth remains steady at 7.5%, consistent with the nation’s performance over the past decade. The overall budget deficit is set at 487 billion FCFA, representing 3.1% of GDP, a level deemed compliant with Bénin’s commitments within the West African Economic and Monetary Union (UEMOA).

Capital expenditures reach 1,572 billion FCFA in authorized commitments, an 8.5% increase compared to the original law. Ordinary ministry expenditures amount to 1,777 billion FCFA, while the state’s paid employment ceiling remains fixed at 102,740 full-time equivalents.

Social measures take center stage

The revised law prioritizes purchasing power and access to essential services. Key provisions include:

• Free secondary school tuition for girls nationwide;
• Expanded electricity and potable water connections for health centers;
• Coverage of emergency medical care without prepayment;
• Strengthened local social safety nets and enhanced support for vulnerable early childhood development;
• Increased agricultural subsidies totaling 90 billion FCFA;
• Targeted assistance for children living on the streets, with particular focus on northern and border regions.

These measures underscore the government’s commitment to inclusive development and equitable access to opportunities.

Modernized tax framework

The newly adopted law introduces structural tax reforms, including:

• Taxation of undistributed distributable profits: Companies failing to reinvest profits within three years of realization will face taxation. A reduced rate of 7.5% applies to voluntarily regularized situations before December 31, 2026, with standard rates and penalties applying thereafter;
• 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 Béninese companies become taxable, regardless of the seller’s residence;
• On-site tax audits are shortened from three to two months for businesses with annual turnover below two billion FCFA;
• Full legal recognition is granted to the digitalization of tax verification notices and procedural documents.

A single amendment was adopted during committee review, introduced by Deputy Gérard Benoshi, to enhance the coherence of digitalization provisions. The Ministry of Economy and Finance endorsed this change.

Special accounts overhauled

The law streamlines special Treasury allocation accounts by abolishing three funds:

• The Fund for the Modernization of Revenue Agencies;
• The Fund for the Development of Arts and Culture;
• The Fund for Sports Development.

Available balances from these accounts will be transferred to the general budget. Additionally, the Disaster Prevention and Management Account has been renamed the Disaster Prevention, Management, and Vulnerability Account and will be funded by 56.2% of mobile telephony royalties in 2026. The criteria for state financial support to local authorities now incorporate climate adaptation and mitigation considerations.

Economic and Social Council guides budget debate

The Economic and Social Council (CES), consulted in accordance with constitutional provisions, issued a favorable opinion alongside fourteen recommendations. Key suggestions include:

• Developing a plan to reduce the deficit to below 3% of GDP by 2027–2029;
• Publishing semiannual reports on public debt sustainability;
• Implementing geolocated digital tracking for agricultural subsidies;
• Conducting semiannual budget execution reviews with the participation of the CES and the Audit Court.

The plenary debate was concise, with both parliamentary groups—the Republican Bloc and the Progressive Union for Renewal—limiting their interventions to fifteen minutes each. Deputies from both sides broadly supported the text, praising its alignment with the economic trajectory established under President Patrice Talon. They emphasized the need for heightened vigilance in expenditure execution and the monitoring of social measures.

The Finance Committee, reviewing the bill, submitted four recommendations to the executive branch:

• Enhancing tracking of street children, prioritizing northern and border zones;
• Clarifying and publicizing the emergency care coverage program;
• Expanding school social measures to include university services;
• Ensuring equitable distribution of investments across all regions of the country.