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Djibouti

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About

Djibouti

Capital
Official languages
Population 
Currency

ISO 4217

Djibouti City

French and Arabic

988,000 (as of 2019)

Djibouti Franc

DJF

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Economy

"Djibouti is a small country located in the Horn of Africa with a population of just over 940,000 people. The economy of Djibouti is largely based on services, which account for around 60% of the country’s GDP. The services sector is mainly composed of port services, telecommunications, banking, and tourism. The country also has a small manufacturing sector, which accounts for around 10% of GDP.

The economy of Djibouti has been growing steadily in recent years, with GDP growth averaging around 5.5% between 2015 and 2019. This growth has been driven by increased investment in infrastructure, such as the construction of a new port and the expansion of the country’s telecommunications network. In addition, the government has implemented a number of reforms to improve the business environment, including the introduction of a new investment code and the establishment of a one-stop shop for investors.

The unemployment rate in Djibouti is estimated to be around 15%, with youth unemployment estimated to be even higher. Inflation has been relatively low in recent years, averaging around 2.5% in 2019. The country’s external debt is estimated to be around $1.3 billion, or around 40% of GDP.

Overall, the economy of Djibouti is showing signs of improvement, with increased investment in infrastructure and reforms to improve the business environment. However, the country still faces challenges, such as high unemployment and a large external debt burden."

Taxation

In Djibouti, both individuals and companies are subject to taxation.


For individuals, Djibouti operates a progressive tax system with tax rates ranging from 0% to 30% on the taxable income earned during a fiscal year, which runs from January 1st to December 31st. The tax system is residency-based, meaning that tax residents are taxed on their worldwide income, while non-residents are only taxed on their Djibouti-sourced income. There are also various deductions and exemptions available to reduce the taxable income, such as deductions for medical expenses, contributions to social security and pension funds, and donations to charitable organizations.


For companies, the corporate tax rate is a flat rate of 25% on their taxable income. There are also various tax incentives available for companies, such as a reduced tax rate for companies that invest in certain priority sectors and for those that create employment opportunities for Djiboutian nationals.


Tax returns for both individuals and companies are generally due on or before March 31st following the end of the fiscal year. Companies are required to pay their taxes in installments throughout the year based on their projected income. Moreover, there are additional deadlines for specific taxes such as the Value Added Tax (VAT) returns, which are due on the 15th of the month following the end of the reporting period.


In Djibouti, the tax authority responsible for administering and collecting taxes is the Djiboutian Revenue Authority. Payment of taxes can be made at designated banks or through electronic payment systems.


It is important to note that Djibouti has a relatively simple tax system, with various incentives and exemptions available. Therefore, it is advisable for individuals and companies to seek advice from professional tax advisors to ensure that they comply with all tax obligations and take advantage of all available benefits.

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