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Niger introduced two measures to support the hotel sector in its first Rectifying Finance Act, 2020 (Act No. 2020-24 of 16 June 2020). First, the straight-line depreciation rate is increased from 2% to 5% for hotel buildings, in order to increase the deductible expenses for income tax purposes. In addition, accommodation and catering services provided by hotels are now subject to value added tax (VAT) at the reduced rate of 10%, instead of the standard rate of 19%. The explanatory memorandum explains these measures by the Covid-19 pandemic which "affected the occupancy rate of hotels", as well as by the important investments made "on the occasion of the African Union Conference" held in Niamey in 2019.

From 26 to 28 April 2022, a training session on fiscal modelling of extractive sector projects was organised for the National Committee (NC) of the Extractive Industries Transparency Initiative (EITI) of Senegal, in partnership with the Natural Resource Governance Institute (NRGI). Ferdi was asked to present an analysis of Senegal's tax law and rent sharing. The presentation aimed to answer several questions: How has the tax system and related rent-sharing evolved in the gold mining sector? How does Senegal compare with other sub-Saharan African countries? What recommendations could be made to improve the tax system?

Senegal is a country rich in natural resources: the extractive sector represents 38% of its exports in 2020. The country produces mainly gold and phosphate. However, Senegal's former mining act of 2003 did not allow for a sufficient share of the mining rent to be captured. Indeed, the context at the time was marked by low commodity prices. The aim of the old mining act was to attract mining investments by offering numerous tax advantages. But when a new commodity price super-cycle took place in the mid-2000s, Senegal was forced to take measures to increase its mining revenues, which led to the adoption of a new mining act in 2016.
The evolution of Senegal's mining policy reflects the difficulties faced by resource-rich developing countries. Many are torn between the desire to attract investors by granting tax incentives and the disappointment that once projects are launched, revenues do not follow, especially when world prices rise but the tax system is not progressive. In order to avoid having to renegotiate mining contracts, it is important to define an adjusted mining tax regime, which can, among other things, adapt to the evolution of international prices.

Updated tax data for 2020 are now available for Benin, Burkina Faso and Cote d’Ivoire.
In Benin, the minimum tax is increasing. The standard rate increases from 0.75% to 1% and the reduced rate granted to industrial activities increases from 0.5% to 0.75% (Act No. 46 of 2019). In Burkina Faso, the value added tax (VAT) rate is no longer a single rate of 18%. A reduced rate of 10% has been created for accommodation and catering services provided by approved tourist accommodation establishments (Act No. 31 of 2020). In Cote d'Ivoire, the minimum tax has been temporarily suspended for the year 2020. The explanatory memorandum explains that studies are underway to reform the minimum tax, as “this tax is considered inadequate by the private sector, insofar as it must be paid by companies even though they make little or no profit” (Act No. 1080 of 2019).

In Benin, the tax annex to the Finance Act, 2020 (Act No. 46 of 2019) increases the minimum tax. Until 2015, this tax was 0.75% of cashable income and could not in any case be less than 200,000 CFA francs. In 2016, a reduced rate of 0.5% was introduced for legal entities with industrial activities, except for mining companies.
In 2020, these amounts were increased. The rate is now 1% for mining companies and legal entities not engaged in industrial activity. It is reduced to 0.75% for legal entities engaged in industrial activity. In all cases, it may not be less than 250,000 CFA francs. A special regime also exists for service stations, which cannot be less than 0.60 francs per liter sold. These new measures are included in the implementing rules of the Finance Act, 2020 (Circular No. 0002/MEF/DC/SGM/DGI/DLC/SLRI of January 3, 2020).