Senegal loses 150 million dollars or 95 billion CFA francs per year in the extractive sector because of commercial misinvoicing, tax evasion, corruption. The revelation was made by William Davis of the Institute for Resource Governance (NRGI) during a roundtable discussion

In the extractive sector, before oil exploitation, Senegal lost up to $153 million in potential tax revenue per year, due to commercial misinvoicing; a sum equivalent to 95.5 billion CFA francs. The information comes from the Report on “Tax Avoidance, Tax Fraud, and Commercial Misinvoicing: Risks for the Sector”, produced by NRGI and USAID, as part of the Trace Program

According to the report, there are significant risks of loss of public fiscal revenue in the inflation of subcontractor costs in the sector. It is important for Senegal to address these risks, especially as the country is in the process of embarking on large-scale oil and gas production operations. to do so, Senegal can strengthen its fiscal authority, audit the accounts of extractive industry suppliers, and reconsider tax treaties

As an example, the study reports that gold exports to the United Arab Emirates represented 1% of Senegal's total exports of goods to the world. However, the price of gold exports to the United Arab Emirates was around 59% lower than the average price of gold exports from Senegal in 2021. According to NGRI, while this does not prove the existence of deliberate underpricing, it might be useful to investigate why the price of gold exports from the country to the United Arab Emirates was on average much lower than that to other countries

The document still reports that as of December 2022, there were still no gold refineries accredited by the London Bullion Market Association (the industry standardization body) in the United Arab Emirates, and it is already well established that tax evasion practices on gold exports occur in Senegal. It is also possible that such false billing is motivated by a desire to hide a transfer of illicit wealth to the United Arab Emirates or to avoid personal income tax

However, according to NRGI again, United Arab Emirates Customs declared prices for gold exports from Senegal that were more than 60% higher than the price declared to Senegalese Customs at export that were more than 60% higher than the price declared to Senegalese Customs at export. Although the declared import prices for a given shipment are generally higher than the prices for the same shipment declared for export, since those in the first case include the cost of insurance and freight, the difference is generally around 6% of the export value, according to IMF data in 2018.