Dakar, Dec 27 (APS) – The Prime Minister, making his general policy statement to deputies, announced a series of tax measures to be implemented in the coming years, including the use of tax revenue as the main financing instrument. sovereign, the end of ”generosity without state control” in tax matters, and the refusal of Senegal to cooperate with tax havens.
Ousmane Sonko, inspector of taxes and professional fields, promised parliamentarians and the Senegalese people to carry out “a vast reform of the General Tax Code” and to guarantee the correct taxation of sectors with high potential. He cited real estate, land and the informal sector among the targeted sectors.
He is also committed to reconciling the need to mobilize tax revenues and the promotion of investments.
If it is admitted that “taxation is certainly the most important link in budgetary policy”, it must at the same time be noted that “Senegal struggles to optimally mobilize tax revenue, which is the main instrument of sovereign financing,” underlined the head of government.
The tax burden rate is a little less than 18% in Senegal, he said, adding that it is therefore lower than the 20% ratio set by the WAEMU convergence criteria.
An “ambitious tax reform”
”Our ambition is to achieve and maintain a tax pressure rate greater than or at least equal to 20%, which would correspond to additional annual revenues of several hundred billion,” assured the Prime Minister.
He believes that ”this result is well within our reach, if our tax system and our tax and customs administrations […] are purged of the defects that weigh down their action. ”This involves in particular curbing the uncontrolled phenomenon of tax loopholes with its poorly or underestimated corollary of loss of revenue.”
”As part of the ambitious tax reform that I am proposing, continued Mr. Sonko, my government is committed here and now to formulating and implementing strong measures to rationalize tax expenditure, in order to gradually reduce the ‘impact of exemptions on revenue mobilization while restoring budgetary margins for financing our economic and social policy.”
”Our tax policy will reconcile the need to mobilize tax revenues with the policy of promoting investments in the country,” promised the Prime Minister.
He points out that ”the analysis of data on tax expenditures gives the impression of generosity without state control, for results whose effectiveness has not been demonstrated”.
From 2019 to 2022, tax expenditures amounted to 2.232 billion CFA francs, said the tax and land inspector. He is of the opinion that monitoring the “generosity” of the State in matters of taxation should make it possible to “assess the effectiveness and efficiency of tax expenditures”.
The government will carry out an “exhaustive audit of all measures tending to reduce the burden of taxation for an economic activity or a socio-professional category of taxpayer citizens”, promised Ousmane Sonko, adding that “a new matrix of measures derogations must be drawn up by the end of December 2025.
”A real avenue for tax fraud and evasion”
The public authorities will also work to rationalize exemptions relating to cement plant tax and income tax, in particular by updating the progressive scale.
The exemptions made to consumption in the social bracket for water and electricity deliveries will also be rationalized, the aim being to “target only the most disadvantaged consumers”, regarding the granting of this advantage.
”The numerous tax conventions concluded by Senegal will also be examined,” the Prime Minister told the deputies.
”To date, Senegal has 18 bilateral tax conventions in force. This policy is a real avenue for tax fraud and evasion,” he denounced, promising to proceed with ”the withdrawal of Senegal from any bilateral convention with a tax haven”.
According to him, the government will ensure the rationalization of derogatory measures scattered across several texts, including the mining and oil codes, as well as the telecommunications and investment codes. “Their repatriation into a single corpus, the General Tax Code, will be carried out, which will be a priority project”.
”In addition to these measures, a vast reform of the General Tax Code will be carried out by acting inversely on the rates and the tax base. For us, broaden the tax base […] is the appropriate strategy to achieve efficient and equitable taxation,” continued Ousmane Sonko.
”As for the base, for example, the correct taxation of sectors with high potential such as real estate, land and the informal sector is a priority budgetary imperative,” he said.
ESF/ASG/MTN
