SENEGAL Law and Practice Contributed by: Hariliva Andriamahefa and Mampionona Razafimamonjy, John W Ffooks & Co
4.2 Tax Incentives for Mining Investors and Projects According to the explanatory note of the 2016 Mining Code, the incentive approach of the 2003 Code was characterised by a broad range of exemptions. This situation did not promote an equitable distribution of revenues between the investor and the state. Therefore, the adoption of the new Mining Code marked the culmination of the fiscal reform process in Senegal’s mining sector. Regarding tax stabilisation agreements, the relevant laws in Senegal allow the inclusion of stability clauses, which provide guarantees to investors against potential increases in tax bur - dens. The Senegalese state has committed to ensuring that the taxation applicable to a mining project will remain fixed and consistent with the terms agreed upon at the time of signing the mining convention or granting the exploitation permit. It is important to note that the conditions and duration of such stability are determined within the mining convention itself. On another note, it should be noted that bilateral double tax treaties can limit taxation. However, it turns out that there is also the provision for denunciation of a tax treaty, where the source state can choose to denounce such treaty. For example, according to the Senegalese govern - ment, the country lost USD257 million over 17 years as a result of the tax treaty signed with Mauritius. If the other state party to the treaty refuses to amend or replace it with a new one, the source state may be forced to denounce it unilaterally. 4.3 Transfer Tax and Capital Gains on the Sale of Mining Projects The General Tax Code provides for a 5% regis - tration fee for the transfer of mining titles, cal -
culated based on the value of the transaction, to ensure appropriate taxation and regulate the transfer of mining rights. This registration fee is applicable for transfer through corporate struc - tures outside of Senegal. 5. Mining Investment and Finance 5.1 Attracting Investment for Mining As a country endowed with significant min - eral resources, Senegal is actively working to promote its mining sector both nationally and regionally. In line with this vision, the govern - ment aims to position the mining industry as one of the key drivers of the country’s economic growth through an initiative called the “Regional Mining Hub”. This project, part of Plan Sénégal Emergent (PSE) for the period 2024–28, seeks to establish Senegal as a leading mining service centre in West Africa. To achieve this, Senegal is committed to imple - menting a strategic framework designed to make the mining sector more attractive to investors. Alongside the Regional Mining Hub initiative, the government is also advancing several flagship projects, including: • the effective exploitation of the Falémé iron ore deposit; • the acceleration of gold and zircon produc - tion; • the development of the phosphate and ferti - liser industries; and • the regulation and promotion of artisanal min - ing activities. Senegal offers a wealth of mineral resources within its subsoil, including:
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