Senegal has submitted a draft Supplementary Finance Law for 2026 to the National Assembly, proposing a cap on the minimum tax, a new contribution on electronic money transactions, and a stamp duty on larger receipts.
The items below come from the draft Supplementary Finance Law for 2026. The draft has been submitted to the National Assembly, and changes might be made before it is passed into law.
There are three measures worth drawing out, one of which we welcome and two of which we have reservations about.
Minimum Tax
The minimum tax will remain at 0.5% of the previous year’s turnover, but will now be subject to minimum and maximum amounts.
For taxpayers dealt with by the Large Enterprises Directorate of the tax authority (DGE), the minimum amount of minimum tax will be XOF 1 million (about USD 1 737), and the maximum will be XOF 10 million (approximately USD 17 367).
Smaller amounts will apply to taxpayers whose affairs are dealt with by the Medium-Sized Enterprises Directorate (DME) or the Tax Services Directorate (DSF). The figures for those categories are not set out in the information we have seen.
Introducing a maximum amount seems a positive development, as it limits the negative consequences of a minimum tax, which imposes a tax even on a loss making company, or one which makes a very small profit, and can therefore reduce the capital available to continue the company’s operations.
It would be better still if the minimum tax were abolished. Inveterate loss making companies should rather be dealt with by careful audits and adherence to transfer pricing requirements.
Electronic Money Transactions
The tax regime for electronic money transactions will be changed, so that there will be an economic solidarity contribution, as a percentage of turnover.
This will be 8% on turnover up to XOF 150 billion (approximately USD 260 million), rising to 9% on turnover up to XOF 300 billion, and then 10% on turnover above XOF 300 billion.
This tax will be paid by the money transfer or electronic money operator, and it will not be a deductible expense for income tax.
This seems like a heavy tax burden on these companies, which can be expected to lead to higher fees charged to customers, with a consequent cost to the economy.
Stamp Duty on Receipts
Any payment in excess of XOF 100 000 (approximately USD 174) will be subject to a stamp duty of 1% of the amount. Payments below that threshold will be exempt.
Many such payments should already be subject to VAT, so this looks like a regressive additional burden, which will be an additional cost to those making payments and can therefore be expected to lead to an increase in the effective cost of goods and services.
The Commercial Implications
Large Companies, and Companies Making Losses
The cap on the minimum tax is the clearest piece of good news in the draft. A company within the DGE’s remit now has a ceiling on what the minimum tax can cost it, rather than an open-ended charge running at 0.5% of the previous year’s turnover.
That matters most to companies that are loss making, or that make a very small profit, because the minimum tax falls on them regardless. A ceiling means the charge can no longer scale without limit against a business that has no profit out of which to pay it.
Money Transfer and Electronic Money Operators
Operators face a contribution charged on turnover rather than on profit, at 8%, 9% or 10% depending on the level of that turnover, and with no deduction for income tax purposes.
A charge on turnover does not adjust for the margin on which a business actually runs, and one that is not deductible is not softened by the income tax computation either. Operators will want to work out early what the contribution does to their pricing.
Customers of Electronic Money Operators
We would expect the contribution to be passed on. Higher fees on money transfers and electronic money are a cost to the people and businesses who use those services, and therefore a cost to the economy.
Anyone Making or Receiving Larger Payments
A 1% stamp duty on any payment above XOF 100 000 reaches a very wide range of ordinary commercial transactions, and many of those payments should already be carrying VAT.
The practical effect is an increase in the effective cost of goods and services, and it is felt most by those least able to absorb it, which is why we describe it as regressive.
Looking Ahead
These measures are proposals. The draft Supplementary Finance Law has been submitted to the National Assembly, and changes might be made to any of them before the law is passed, so the figures above should be read as the current position rather than the settled one.
Of the three, the cap on the minimum tax is the one we would welcome. It does not remove the objection to a minimum tax, which is that it charges tax to a company that has made no profit, but it does limit the damage.
The other two, the contribution on electronic money operators and the stamp duty on receipts, both sit on turnover or on the payment itself rather than on profit, and both can be expected to reach the customer in the end.
It will be interesting to see which of them survive the National Assembly in their current form.
If you would like to discuss what these proposals could mean for your business in Senegal, our team would be glad to help. Get in touch.
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