Senegal Grants VAT Relief for Agricultural Equipment, Facilities and Services to Cut Investment Costs

• New exemption introduced. Senegal has exempted specified agricultural equipment, facilities and services from VAT, whether imported or locally produced, under Joint Order No. 019972 of 17 July 2026, signed by the ministers responsible for finance and agriculture and taken in application of article 361, paragraph 26, of the General Tax Code.
• Broad scope with retroactive reach. The annex covers soil preparation, sowing, fertilization, irrigation, harvesting, horticulture, poultry and livestock, plus services such as land clearing, mechanized farming, phytosanitary and veterinary services, technical studies and training; previously suspended VAT under approved investment programmes converts to an exemption by operation of law.
• Procedural conditions. Customs must identify the relevant tariff headings and configure systems to grant import relief directly, while domestic beneficiaries (investors approved under the Investment Code, projects of at least CFA 15 million) must complete the applicable VAT exemption approval formalities.

Extended Article

Overview Senegal has introduced a VAT exemption targeting the agricultural sector, covering a defined list of equipment, facilities and services. The measure applies whether the qualifying equipment and facilities are imported or produced locally, ensuring that domestic manufacturers and importers are treated consistently. It was introduced by Joint Order No. 019972 of 17 July 2026, signed jointly by the Minister of the Economy, Finance and Planning and the Minister of Agriculture, Food Sovereignty and Livestock, and taken in application of article 361, paragraph 26, of the General Tax Code. The order is to be published in the Official Journal. [directactu.net]

Scope of the exemption The annex to the order sets out the eligible items in detail. On the equipment side, it covers tractors and power tillers and machinery used for soil preparation, sowing and fertilization, irrigation, harvesting and post-harvest activities, horticulture and protected crops, poultry farming and livestock production. On the services side, it extends to land clearing, mechanized farming, drilling, drainage and irrigation works, phytosanitary treatments, veterinary services, technical advice, studies and agricultural training. The breadth of the list reflects an intent to relieve the full agricultural value chain, from land preparation through to post-harvest handling and specialist support services. [directactu.net], [senego.com]

Conversion of suspended VAT and retroactive effect A notable feature of the measure is its treatment of VAT previously suspended on qualifying acquisitions made under approved investment programmes. Until now, companies approved under the Investment Code benefited from a VAT suspension on local purchases and imports during the investment phase, but agricultural businesses carrying out VAT-exempt activities could not recover that tax once operations began—so the suspended VAT became a permanent cost. Under the new measure, that suspended VAT is converted into an exemption by operation of law from the date on which the commencement of operations is officially notified, removing this residual burden. [ecofinagency.com], [agenceecofin.com]

Procedural framework Implementation differs between imports and domestic supplies. For imports, the customs administration must identify the relevant tariff headings and configure its systems so that the exemption is granted directly at the point of importation—removing the need for beneficiaries to claim relief after the fact. For domestic supplies, beneficiaries must complete the applicable VAT exemption approval formalities before the relief applies. In practice, the measure—announced by the investment-promotion agency APIX on 27 July 2026—targets investors holding an approval under the Investment Code for projects of at least CFA 15 million. Businesses will therefore need to align their procurement and customs classification processes with the annex to secure the benefit. [senego.com], [ecofinagency.com]

Policy objectives and practical impact The measure is intended to reduce agricultural investment costs, improve the competitiveness of agricultural businesses and support the modernization of the sector. It complements the broader Agro-Sylvo-Pastoral and Fisheries Orientation Law (LOASPH) and mechanization initiatives such as the “Allo Tracteurs” programme. For agribusinesses and investors, the exemption lowers the effective cost of capital equipment and key services, while the conversion of suspended VAT into a definitive exemption provides welcome certainty for holders of approved investment programmes. Careful attention to tariff classification (for imports) and to the approval formalities (for domestic supplies) will be essential to realise the relief in practice. [directactu.net], [ecofinagency.com]

Sources

• Mécanisation agricole : l’État exonère de TVA les équipements et services – DirectActu (arrêté conjoint n° 019972 du 17 juillet 2026)
• Sénégal : exonération définitive de TVA sur une liste d’équipements agricoles – Senego
• Senegal Targets Higher Farm Productivity Through VAT Reform – Ecofin Agency
• Sénégal : exonération de la TVA sur les équipements agricoles – Agence Ecofin