Embassy of India

Dakar

 

Webinar on Opportunities for bilateral cooperation in engineering sector between India and Senegal, The Gambia, Guinea Bissau, Cabo Verde, August 21, 2020

 

WEBINAR REPORT

 

Captioned webinar was organized by the Embassy of India, Dakar in coordination with the Engineering Export Promotion Council of India (EEPC) on August 21, 2020. The webinar was organized with the following four sub-sectors as subjects: Medical Devices, Auto Parts and Components, Electrical Machinery, and Agricultural Machinery. Discussion / background paper circulated before the webinar (please see here) and the copies of various speeches, power points made during the webinar (please see here) would be of interest.

 

Invitees included Indian Export Promotion Organizations, such as EEPC, CII, FICCI, FIEO etc, Indian Chambers of Commerce, Indian SMEs, state-wise companies in India, and Central and State Government officials and Ministries in India and accredited countries. Also invited were the Chambers of Commerce, government entities as well as companies in this sector in the four countries of accreditation of the Mission.

 

The webinar commenced with opening remarks by the Ambassador, followed by Keynote address by Mr. Mahesh K. Desai, Chairman EEPC. Then Dr. Srikar Reddy, Joint Secretary (EP-Engineering) & (FT-Africa) in the Ministry of Commerce, gave an insight into the current bilateral trade between India and the four countries and the potential existing for expanding the trade ties, with particular emphasis on increasing the exports of India to Africa. This was followed by brief presentations by the Mission officers on the existing opportunities for Indian companies in the above four sub-sectors in the four countries and highlights and advantages of the region, and individual countries also. A presentation on India's achievements in various fields was also made. EEPC also made a detailed and in-depth presentation highlighting the opportunities for Indian companies and the proposed engagement of EEPC with the companies in these countries and in Africa. EEPC also briefed about their post-Covid outreach and their organization of virtual meetings and exhibitions through dedicated platforms in the current situation.

 

There were several queries raised by the participants (detailed below) during the Q&A Session. Some of the queries were: requirement of after-sales service especially in agri-machinery equipment, training of the local people in agri-machinery and medical devices' operation, dairy and solar electricity, textile jewellery, possibility of tax benefits for investors etc. These queries, and their responses, in some cases interim responses owing to the complexity of the query, are attached to this report.

 

This webinar was an unqualified success, with registrations crossing over 150, showing the interest of Indian companies in this sector and in this region and with participation from Indian as well as companies from countries of accreditation. The queries received indicate a genuine interest on the part of the companies, both Indian and those from the four countries, to enhance their engagement in trade and commerce for mutual benefit.

 

Way forward

 

Please see here for way forward after the webinar.

 

Webinar documents

 

Speeches made during the webinar as also the power points used may be seen here.

Queries

Besides queries on list of contacts of companies in a range of areas, that have been separately been answered by the Embassy via email, there were some general questions of common interest that are given below:

Power Supply Situation, Opportunities in Renewable Energy

Energy supply and distribution is a high priority for the Government of Senegal. The latter has made power sector development a key component of its Plan Senegal Emergent, which aims to make Senegal an emerging economy by 2035. Priorities include lowering the cost of generation by reducing dependence on imported liquid fuels and increasing electricity access – particularly in rural areas. Senegal has significant potential to develop solar and wind power – as well as the opportunity to develop its offshore natural gas resources.

 

In the energy sector which absorbs CFAF 1,645.1 billion (around US$ 3 billion) or 12% of PAP-2, the continued orientation of the energy mix towards renewable energies is underway, with projects for the creation of solar power plants, in particular the Scaling-Solar (60 MW), the extension of the Malicounda solar power plant (22 MW), the SOLARYS project (3X12 MW), the solar park of the Organization for the development of the Senegal river (OMVS), the 159 MW wind farm at Taïba Ndiaye. The power station Malicounda HFO (125 MW) and projects to install storage infrastructure for oil and gas terminals are also among the priorities over the period 2019-2023. Regarding gas to power project, the objective is to convert in 2022 SENELEC power plants into gas, allowing thereby Senegal to have the best mix in the world with only gas, wind energy, solar and hydroelectricity.

 

Different investment opportunities in renewables include:

 

§  Solar energy

§  Hydropower

§  Domestic fuel (biomethane) power plants

§  Biofuels

§  Wind

 

Compiled Applicable Tax for Foreign Contractor

Senegal tax year is the calendar year ends on 31 December. The financial statements and the taxable income statements must be filed by April 30 of each year. Otherwise, penalties apply for late filing, late payment, failure to file and filing an incorrect return. The amount of the penalty depends on the nature of the tax and/or violation.

 

Senegal has a single VAT rate of 18%.  VAT on tourism activities is 10%.  A 17% special tax on financial activities (mainly banking, money transfers, and change operations) is applicable instead of VAT.

The corporate tax is 30% in Senegal. In a deficit year, The CMT (Contractual Minimum Tax) is charged instead. The CMT is based on the annual turnover, which must not be under CFA 500,000 or over FCFA 5million.

 

When it comes to withholding taxes,

Senegal charges a 20% withholding tax on payments to foreign suppliers with no base in Senegal for services rendered or used in Senegal, unless other or different tax agreements apply.

 

The employer deducts the withholding tax from the employee’s wages. The amount is determined by the tax authorities. The employer must pay an employer tax of 3% on the entire payroll.

 

More details on other taxes are also available on the following links: https://www.taxesforexpats.com/senegal/guide

https://import-export.societegenerale.fr/en/country/senegal/company-corporate-taxes?url_de_la_page=%2Ffr%2Ffiche-pays%2Fsenegal%2Fentreprise-impot-sur-les-societes&

Main Source  is the General Tax Code available on the website (only in French): http://investinsenegal.com/IMG/pdf/cgi2013-3.pdf

 

Opportunities/ Incentives available in Senegal

Senegal offers various opportunities in sectors such as agriculture & agribusiness, digital economy, mines, seafood and aquaculture, rice, health, tourism.

 

In Senegal, investment is supported by an attractive incentive policy based on regularly updated legal, tax and customs measures. Tax relief measures, guarantees and advantages are granted to investors through the new investment code, the free export company regime. For instance, the new investment code provides specific incentives to stimulate investment in key sectors such as agriculture and agribusiness, fisheries, livestock and related industries, manufacturing, tourism, and mining, among other sectors. Investment incentives include :

 

·        Customs duty exemptions (over 03 years);

·        Suspension of VAT (over 03 years);

·        40% tax credits for the eligible and deductible investment within 05 years;

·        Free export company status for agricultural, industrial and telecommunications companies deriving at least 8% of their turnover from exports

 

Export Free Company Status

This status is granted to companies which export at least 80% of their production. Agriculture in the broad sense, industry and tele-services are the sectors eligible for EFE status. Several advantages are granted to companies, in particular the reduction of the corporation tax (15%), the exemption from the tax on the wages, on the registration and stamp duties, on the contribution of the patents, the exemption from duties and taxes on production equipment and raw materials, and more.

 

Incentives are granted by the tax code and several laws, including the investment code, the mining code, the petroleum code, the environment code, the free zone law, the free exporting companies law.

 

Investments valued higher than FCFA 250 billion (approximately US$ 500 million) are entitled to particularly advantages negotiated directly between the investor and the Ministry in charge.

 

A modern single window centralizes, facilitates and accelerates administrative formalities. For more details, please visit: www.investinsenegal.com

 

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