Senegal cancels tax treaty with Mauritius

By Moïse Gnakouri, Doctoral Researcher, Catholic University of Louvain, Belgium

The government of Senegal canceled its tax treaty with Mauritius earlier this year, after publicly denouncing it for several years, according to an ICIJ report published on May 26.

According to the Senegalese government, the Senegal-Mauritius tax treaty, signed in 2002, has been responsible for the loss of approximately USD 257 million over 17 years.

This decision of the Senegalese government comes under article 29 of the tax treaty. According to this article, each State party can end the treaty before June 30 of each calendar year after the fifth year of its entry into force.

However, despite this decision, the tax treaty will not end immediately. It will continue to be applied until June 30, 2021, for Mauritius and December 31, 2021, for Senegal.

This decision of the Senegalese government comes at an inconvenient time for Mauritius. One year ago, the Mauritius-Kenya tax treaty was invalidated by the Kenya High Court for failing to follow parliamentary procedure during the ratification process.

The Indian Ocean state was also in the headlines recently because of the  « Mauritius Leaks». Several African countries are considering renegotiating their tax treaty with Mauritius.

However, in 2015, both South Africa and Rwanda began talks to renegotiate their tax treaties with Mauritius.