Thanks to the recent fiscal reform, the Tax Code has moved our system more in line with international standards by setting the stage for a substantial decrease of the capital gains tax rate.
Indeed, tax decrease has been made possible, thanks to the trading tax reform, the decrease in the tax rate for companies (from 35% to 33%) and the extension of the accelerated depreciation system.

The Customs Regulations include a set of economic guidelines, designed to facilitate under specific conditions, various operations, such as:

• production (temporary admission, warehouses, draw-back, etc.)
• storing (warehouses)
• transport (transit)

The Senegalese state has promulgated a new investment code, with the view of continually improving the business environment, to boost private investment.

The new code meets the following objectives:

• Improvement of competitiveness in Senegal, in terms of incentives to investors
• Cohesion with the fiscal reform
• Job creation
• Decentralisation of production-related activities
• Densification of the existing industrial sector

Major innovations

The new code is characterized by a set of major innovations aimed at boosting private investment in strategic sectors ; these innovations include:

• The setting-up of a system of tax credit for investments amounting to 40% of the fixed assets investments, over a period of five (5) years, levelled off, for each exercise, at 50% of the taxable income for the new companies, and at 25 % for extensions;
• Extending of the code to strategic sectors (teleservices, industrial areas, cyber-villages, malls etc.)
• Removal of the ceiling regarding the amount of planned investments for services;
• The promoting of activities employing labour intensively and granting of incentives for job creation in the other regions;
• Delimitation between the investment stage and the operation stage, which allows the investor to fully enjoy the benefits of exploitation for a duration of five (5) years, and which also allows the Administration to collect all the information relating to the carrying out of the approved programme and the launching of activities;
• Compliance with the provisions of the Environment Code;
• Removal of the minimum amount of personal funds required;

The status of the free export company covers the field of agriculture, in a broad sense, as well as industry and teleservices. In order to be certified, a company should have an export potential of at least 80% of its turnover.

Certification to the status of a free export company guarantees to free export companies:

• Free transfer to destinations in countries outside the Franc zone, of all sums required to make an investment and carry out their commercial and financial operations
• Free transfer of the salaries of foreign employees
• Free transfer of the dividends for foreign shareholders
• The recruiting of foreign staff without any restriction
• The arbitration of the International Centre for the Settlement of disputes relating to investment (CIRDI)

Additional benefits are granted to companies, alongside these guarantees. These have a validity of 25 years and are renewable from the date they were granted.

The new law on BOT, which was passed by the Senegalese Parliament in April 2004, filled a legal vacuum as there had been no formal regulation relating to public/private partnership for the financing, realisation and operation of public interest infrastructures.

The law on BOT now ratifies the legal framework enabling this new kind of partnership. It applies to the so-called “Build, Operate, Transfer” contracts, through which the state, the local authorities, or a public institution or enterprises with public participation (the seller) entrusts a third party (the project operator), to run a public interest infrastructure (all or part of the conception, financing, and operation phases), insofar as the private operator remunerates itself mainly from the paid user fees.

The new law prioritises transparency in the selection procedures, while guaranteeing a satisfactory execution of the contractual commitment . All BOT contracts are submitted to advertisement and to a competition process. There is also a tender committee, whose proceedings are recorded in minutes, which are then made public.

The law on BOT also regulates the conditions of operation of the Council in charge of Infrastructures, which has a function of regulation and mediation, within this partnership. This council helps build sustainable consensuses in the field of infrastructures. It also has to monitor the implementation of projects and the prevention of incidents or disputes, that could have an impact on the performance of contracts.