Mauritius again in dirty linen over Senegal's money
A lopsided treaty signed between Senegal and Mauritius eased the waving of $8.9 million in taxes for a Canadian company, SNC-Lavalin, the International Consortium of Investigative Journalists or ICIJ said.
That was made possible thanks to Mauritius being a renowned tax haven.
The loss in taxes is dire for the Senegalese economy but benefits Mauritius. As if Mauritius is living partially on the woes of the African nations.
And there is no end to the dirty tricks played under the umbrella of the Offshore financial services.
The tax waiver was on a $50 million deal that the world’s largest engineering companies scored in Senegal to build a processing plant.
Senegal is listed as one of the poorest nations in Africa.
That island, Mauritius, has an established banking system and is attractive in many ways.
it also has a level of political stability unusual across Africa and a well-trained workforce.
And Mauritius offered engineering company SNC-Lavalin a significant benefit that allowed it to avoid up to $8.9 million in taxes.
“That lost revenue is no small matter in Senegal, a country where nearly half of the population lives in poverty, where 5 percent of newborns die and where one in six children are stunted by years of poor nutrition.
“The forgone tax would have covered half the cost of running Senegal’s largest public hospital for a year.
“The Senegal-Mauritius treaty, concluded in 2004, is one among scores of agreements that keep billions of dollars in tax revenue every year from reaching poor African and Asian countries,” said ICIJ.
That was never the intention. Countries usually sign treaties to avoid taxing a company’s income twice, once in each country.
Developing countries, in particular, have signed agreements in the hope that clarifying taxes paid by multinationals would encourage investment and jobs in countries that multibillion dollar operations might otherwise deem too risky.
Although originally hailed as deals that would benefit both sides of the agreements, a chorus of critics increasingly denounces treaties between wealthier and developing countries, particularly in Africa, as harmful to nations like Senegal.
Senegal is in West Africa, a poor region in one of the world’s most impoverished continents.
In 2011, century-old Montreal company SNC-Lavalin signed a deal to design and build the $50 million processing plant for the Grande Cote mineral sands mine. At the time, the project was perceived as a great opportunity for Senegal.
In June 2017, members of Senegal’s parliament issued a report – obtained by International Consortium of Investigative Journalists – that faulted Grande Cote on several fronts. In particular, the report criticized the lack of diverse compensation options for those who were resettled.
