Madagascar - Transparency of the Regulatory System Madagascar - Transparency
Bureaucracy and inconsistency in the application of regulations hinder investment and can lead to corrupt practices. Though the existing legislation attempts to establish clear rules of the game, corruption, a lack of enforcement, and a shortage of resources and capacity have led some international investors to experience unfair competition from unscrupulous actors. Others complain of a lack of transparency in government regulatory decisions.
The National Council on Competition instituted under the law no. 2005-020 (Law on Competition) of 17 October 2005, was only recently established in November 2015. Though it is now operational, its effectiveness in enforcing competition rules cannot yet be evaluated.
Tax, labor, environment, health, and safety standards are generally not used to impede foreign investment, though as mentioned above, bureaucratic procedures and red tape are often sources of corruption, and foreign companies report being targeted for frivolous tax assessments and nuisance suits pertaining to alleged violations of such regulations. There are no informal regulatory processes managed by non-governmental organizations or private sector associations.
Proposed laws and regulations are generally not published in draft form for public comment. Traditionally, only the annual budget and finance law is open for comment from the private sector, but the current government has also sought comment on proposed laws and regulations in specific areas from a limited pool of stakeholders. These include proposed laws on public private partnerships, and the mining and upstream petroleum industries. The general public, however, is as a whole not typically included in these consultations.
Companies in Madagascar use an accounting framework, Plan Comptable 2005, which is compatible with International Accounting Standard/International Financial Reporting Standard norms.
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