The West African country of Senegal has abruptly ended its double taxation treaty with the island of Mauritius, it was confirmed today.
According to reports, Senegal had previously threatened to cancel the agreement if specified key conditions were not met.
Among other grievances, Senegal alleged that the bilateral treaty had caused the government $257m in lost tax revenue since the agreement was signed in 2004.
The problem with this tax treaty is that it was unbalanced.”
It is the first time that Senegal has called time on a bilateral tax treaty.
Magueye Boye, a Senegalese tax official told the International Consortium of Investigative Journalists, "The problem with this tax treaty is that it was unbalanced."
Before the covid-19 pandemic, Mauritius was ranked the second fastest-growing wealth market, beaten only by China.
In February, Mauritius was added to the Financial Action Task Force (FATF) greylist, a list for jurisdictions with deficiencies in their regimes to counter money laundering.
It is almost unprecedented for countries to cancel bilateral tax agreements with each other.