ICF business reform projects help to drive forward Senegal’s economy
February 29, 2016
The economic foundations of the West African country of Senegal include industries encompassing agriculture, natural resources and commodities, while tourism and the hospitality industry are also growing in importance. Against this relatively diverse economic background, ICF, together with the Government of Senegal, has been particularly involved in projects in the areas of customs modernisation to facilitate trade across borders, tax reform and construction permits.
The customs modernisations projects have been successfully completed, while the tax and construction permits projects continue into 2016. In 2012, one of the customs modernisations projects that ICF supported, the GAINDE 2000 electronic pre-clearance system, won the UN Public Service Awards in the category of ‘Improving the Delivery of Public Services’, for its electronic Single Window for facilitating foreign trade and customs processes.
Facilitating foreign trade and customs formalities
Global practice generally outlines three main steps when clearing the import and exports of goods across borders, namely: customs pre-clearance, customs clearance and finally the release of the goods from the port or airport. In Senegal, these three stages are handled by different institutions and prior to May 2008, they were not interconnected in, leading to a lengthy and cumbersome process for clearing goods.
GAINDE 2000, a public-private partnership in Senegal, managed the pre-clearance process; the Customs Authority managed the clearance process and the Port Authority manages the release of goods. Information from GAINDE’s electronic pre-clearance system had to be manually inputted into the Customs Authority’s electronic clearance system.
Two ICF projects worked to tackle the integration and improvement of the pre-clearance and clearance customs processes, namely the ‘Paperless Single Window Customs System Project, Phase I and II’ and the ‘Modernization of Customs Authority Project’. The former project focused on the relationship between the customs pre-clearance and clearance stages. The latter project enhanced efficiencies further during the clearance stage.
Phase I of ICF support to the Paperless Single Window Customs Systems Project, refined GAINDE’s system, enabling electronic pre-clearance documents to be submitted directly into Customs’ electronic system. This resulted in the reduction of the pre-clearance process from two days to seven hours.
Phase II of ICF support modernized the Customs’ clearance stage by introducing electronic submission of customs declarations. This helped to reduce the average declaration and clearance times for both imports and exports.
The Modernization of Customs Authority Project then focused on the customs clearance step, which had previously been very fragmented. The project streamlined, automated and digitised the Customs clearance processes, integrating the clearance system into one common electronic trade data platform. It also introduced a new regulatory and administrative framework for the customs clearance procedures.
As a final result of these two projects, cargo dwell time for imports has been reduced substantially from 17 days to 3 days. It is estimated that private sector opportunity cost savings derived from this improvement exceeded US$ 150 million over the 2008-2013 period.
ICF has been working with the Government of Senegal to improve tax administration in the country. The first phase of ICF support introduced a new legal framework that streamlined regulatory and administrative tax procedures. This was to increase transparency of tax payments as well as to reduce the time and cost requirements for tax administration. The project established e-Tax and e-Payment systems, automated existing administrative processes and digitised existing tax records.
The project has showcased two major results. Firstly, the declaration and payment of taxes through the Large Taxpayer Office now takes only 15 minutes instead of two days. Secondly, the processing of corporate taxes reimbursements and VAT refunds now takes 15 days and 30 days respectively, instead of the previous 175 days.
ICF is currently implementing a second phase of support which aims to enhance the eServices system to increase the number of taxpayers who are using these electronic services. This will be done by enhancing the e-Payment system and improving operations within the tax services centre.
Construction Permits Project
Part of the construction permit process includes verification on whether the proposed structure meets the required building codes. In Senegal, obtaining a construction permit had traditionally been a long process, taking an average of 90 days. This resulted in a number of illegal and unsafe constructions.
ICF is therefore working with the Government of Senegal to reduce the time and costs of processing construction permits in the Dakar region. A successful implementation of the project will pave the way for a national roll-out, to benefit the safe and timeous construction of new buildings countrywide.
Overall, the project is intended to reduce processing time substantially, as well as costs, and to encourage the process of obtaining a construction permit for greater safety in a growing urban environment.
The reforms in Senegal’s customs processes, tax administration and construction permits are expected to play an important role in the continuing improvement of the country’s investment climate. These improvements will have a great impact on the various elements of Senegal’s diverse and growing economy, stimulating the growth of enterprises and the creation of jobs.
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