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PRESENTATION OF THE INVESTMENT LAW AND THE PROCEDURES OF APPROVAL

1. PRESENTATION OF THE INVESTIMENT LAW

The invesment law, presently in force in Mali, has been instituted by law n* 91-048 / AN-RM dated 26 Februry 1991.It shall abrogate and replace law n* 86-39 / AN-RM dated march 08, 1986.The investment law shall institute a preferential tax system in order to promote both national and foreign private capital investment in the activities of production and performance of services, and shall offer the necessary guarantees for securing investment realised.

THE SYSTEMS OF APPROVAL


Three systems of approval shall be provided for in the present investment law,
that is :

- A-System, called system of small and medium - sized firms.It shall apply to investment whose amount is inferior to 100 millions CFA francs (152,450 Euros).

- B-System, called system of large firms which shall apply to investment superior or equal to 100 millions CFA francs.

- The system called system of free zones which shall apply to new firms dealing mainly with exports which can sell of up to 20% or of there production on the national market.

ADVANTAGE GUARANTEED

Firms, which are approved by the investment law shall benefit from the following tax shelters :

1) Exemption from taxes on industrial and commercial profit (tax on BIC and licence fees.The duration of this exemption shall be 5 years as far as A-system is concerned, and 8 years as far as B-system is concerned.

2) Exemption from tax on land income and tax on "les biens de mains mortes"concerning new constructions.The duration of this exemption shall be 5 years for A and B-systems.The duration shall be 10 years concerning property development project firms.

3)The spreading out, other 3 years, of registration fees on companies creation acts exemption from these fees in case of the increase of the capital.

Firms approved in the system called system of fee zones, shall enjoy total and permanent exemption from fees and taxes relative to the practice of their activities.However, they shall be authorised to sell 20% of their productions on the national market by paying of duties and taxes normally owed.

The revial of public firms by new promoters within the framework of the privatisation programme of public firms, can ,according to the amount of investment, enjoy the advantages of A-system or B-system.
The establishment of industries in the regions shall be encouraged through the extension of tax exemption period on industrial and commercial profits and licence fees. The Decree of implementation of the law shall specify three geographical zones of which Bamako District constitutes Zone "1".concerning Zone "2"(Koulikoro, Sikasso and Segou region), The period of exemption from taxes on industrial and commercial profits and licence fees shall be extended to two years.

Concerning Zone "3", (Mopti, Tombouctou, Gao and Kidal Regions), this extension shall be four years.

GUARANTEES

Foreign investors shall enjoy the same preferential rights as national investors.

The right to capital transfer and its income shall be guaranteed to individual or legal entities that make in Mali an investment funded by a contribution of foreign currencies.In other words, foreign persons who invest or who hold a share in a Malian firms, shall have the right, subject to compliance with regulating on matters of exchange, to transfer, in the foreign exchange sold at the time of the constitution, of the said investments, dividends, products of liquidation or of the realisation of their assets and salaries.

Disputes, which could arise between foreign investors and the Government, shall be settled first through friendly procedure, or within the framework of bilateral agreements for protecting foreign investments. In case of failure, the parties shall have recourse to the arbitration procedure which shall be the one provided for by the March 18, 1965 Agreement creating the International Centre for Settlilng Disputes Relative to Investment among States and Nationals from other States(CIRDI), established under the aegis of the World Bank and ratified by Mali on January 3, 1978.

Approval by Invesment Law is equally worth the investment approval for granting any guarantee in the spirit of article 15 from the Treaty instituing the Multilateral Agency for Guaranteeing Investments(A.M.G.I.), signed by Mali in October 1990.

APPRAISAL CRITERIA OF PROJECTS TO BE APPROVED


The rate of added value, which has to be equal or superior to 35%, shall be the only fundamental element for appraising projects.
No minimum level of investment is required for a project to be eligible to the law.

FIELD OF IMPLEMENTATION OF THE INVESTMENT LAW

The only firm excluded from approval by the Investment Law, shall be the ones that are exclusively commercial, firms of research and development of petroleum and mining. Commercial Law, Petroleum Law, and MIning Law govern these activities.

The period granted for the realisation of projects shall be set to five (5) years with a possibility of extending it to six (6) years after starting operation.



2. PROCEDURE OF APPROVAL

All the applications for approval by the Investment Law, or the applications for prior authorisation for the creation of firms are centralised at the level of the single counter.

Any application file for approval by the Investment Law, shall be accompanied by the following documents :

- An application stamped and sent to the Minister of Industry;
- An application study in five (5) copies prepared in accordance with the projects presentation model;
- A copy of authorisation to exercise, should the occasion arise.

Application forms for approvals, as well the projects presentation model, are available at the level of the single counter.

The approval period of a project by the Investment Law, shall imperatively be set to thirty (30) working days from the date of reception of the application.Only when there is non-compliance with a legislative or statutory provision in force, shall the non-approval be delivered.The approval shall be granted through a decree issued by the Ministry of Industry.

The authorisation period for the setting up of industries without advantages from the Investment Law shall be to fifteen (15) working days from the delivery date of the life, and the authorisation granted through a decision issued by the Ministry of Industry.




LAW N*91-048 / AN-RM DATED FEBRUARY 26,1991
RELATING TO INVESTMENT LAW


The National Assembly has deliberated and adopted during its February 2, 1991 Session.
The President of the Republic has promulgated the law which terms are as follows :

TITLE 1 : Objectives

Article 1 : The present law aims at encouragement investments in Mali in order to :

a) Mobilise national savings as well as the contribution of capital coming from abroad ;
b) Create national jobs, train managers and a skilled national labour ;
c)Create, extend and modernise the industrial and farm production - forestry - pastoral infrastructures ;
d)Encourage investment in the exporting industries and the economic sectors using raw materials and other local products ;
e)Create small and medium - sized firms, and develop micro-firms ;
f)Transfer neccessary and appropriate technologies ;
g)Realise investments in the least developed regions of the country ;
h)Encourage and promote a complementary economic fabric ;
i)Favour the revival of public firms by new promoters within the framework of the privatisation programme of public firms.

TITLE 2 : Definition and field of implementation

Article 2 : Is regarded as investment, in the spirit of this law, the funding of fixed assets and initial working capital within the framework of a development project.

Article 3 : The individual or legal entities, whatever their nationalities, regularly settled in Mali in accordance with the Malian legislation, fulfilling or wishing to fulfil an activity which falls into the field of implementation as defined in the below-mentioned article 4, shall be assured of general guarantees and advantages cited in this law, subjects being eligible according to the defined criteria through a Decree issued by the Council of Ministers.

Article 4 : The following shall be excluded from enjoying the advantages of this law: firms having an exclusive commercial character, research and mining development firms, research and petroleum development firms.These activities shall be governed by commercial law,mining law, petroleum law and their texts of implementation.

Article 5 : Firms which fall into the field implementation of this law, shall be granted the benefit of one of the following systems.
- The system of small and medium-sized firms called "A System"
- The system of large firms called "B System"
- The system of free zones.

Article 6 : The direct added value shall be the fundamental elements for appraising projects.Their minimum rate, as well as its components, shall be set through a decree issued by the Council of Ministers.

Article 7 : The approval procedure, as well as the appraisal elements other than the added value, shall be determined through a Decree issued by the Council of MInisters.

Article 8 : Industrial investment seeking no advantage from this law, shall, nevertheless, be subject to prior permission from the Minister Responsible for industries.

TITLE 3 : General Guarantees

Article 9 : The individual or legal entities concerned by the article 2 of this law, shall receive the same treatment in the same conditions of eligibility.

Article 10 : The right to the transfer of capital and its income, shall be guaranteed to foreign individual or entities, who make in Mali an invesment funded by a contribution of foreign currencies.

Foreign persons who proceed to investment of who hold jobs in a Malian firms, shall have the right , subject to exchange control, to transfer in the disposed of foreign currency during the realisation of the said investment, dividends, and products of any nature, invested capital, products of liquidation or the realisation of their assets and salaries.

TITLE 4 : Advantages granted

Article 11 : Firms whose level of investment is inferior to one hundred (100) millions francs, shall be accepted in "A System" and shall enjoy the following advantages.

1) Exemption from taxes on individual and commercial profit, as well as on licence fees during the first eight (8) financial years ;

2) Exemption form taxes on land income and taxes on "les biens de main morte" ;
The exemption period shall run from the completion date of the construcction of the concerned buildings. The duration of the exemption from taxes on land income and from taxes on "les biens de main morte" shall be brought to ten (10) years for agencies promoting real estate.

3) The spreading out, over three (3) years, of the registration fees, payment on the articles of incorporation of companies and exemption from these fees in case of capital increase.

The first third of the fees shall be paid during the registration, and the two other thirds shall be paid annually.

Article 12 : Firms whose level of investment is equal or superior to one hundred (100) million francs shall be accepted in the "B-System" and enjoy the following advantage :

1) Exemption from taxes on individual and commercial profits, as well as on licence fees during the first eight (8) financial years ;

2) Exemption form taxes on land income and taxes on "les biens de main morte" ;
The exemption period shall run from the completetion date of the construction of the concerned buildings. The duration of the exemption from taxes on land income and from taxes on "les biens de main morte" shall be brought to ten (10) years for agencies promoting real estate.

3) The spreading out, over three (3) years, of the registration fees,payment on the articles of incorporation of companies and exemption from these fees in case of capital increase.

The first third of the fees shall be paid during the registration, and the two other thirds shall be paid annually.

Article 13 : Take-overs so as to relieve public firms by new promoters within the framework of the privatisation programme of public firms, can, according to the investment amount, enjoy the advantages in A and B Systems.

TITLE 5

Article 14 : The new firms which are dealing mainly with exports shall be classified under the system of free zones. These firms shall enjoy, to this effect, the total and permanent exemption from any fees and taxes relative to the practice of their activities.

However, these firms, if they so wish, can sell off up to 20% of their production on the local market, which shall be subject to fees and taxes being imposed on similar imported products.

TITLE 6 : Particular Provisions

Article 15 : In addition to the advantages provided for in "A and B Systems" firms which settle in the areas not yet or insufficiently industrialised (Zone II and III), shall enjoy the exemption during two (2) financial years in zone II, and during four (4) financial years in zone III, from industrial and commercial profits (BIC) and from licence fees.For the implementation of these provisions, the Malian territory is divided into zone I, zone II and zone III specified in a Decree issued by the Council of Ministers.

TITLE 7 : Special Provisions

Article 16 : For each of the advantages provided for by this law, the first financial year taken into account, unless otherwise stated, shall be the one during which the first delivery or putting up for sale of products, services, to the exclusion of trials, is recorded.

The accepted firms shall notify through a registered letter, the starting date of their productions to the competent authorities specified in a Decree issued by the Council of Ministers.

Article 17 : Firms governed by this law shall comply with the legislation and the regulation in force on matters of trade and legal statues of companies, before their putting into operation.

Article 18 : Firms established in Mali shall comply with the following obligations :
- keeping regular accounts according to the accounting plan accepted in accordance with the provisions of the Commercial Law ;
- favouring the recruitment of nationals through the running of vocational training sessions at all levels in firms ;
- complying with legislation on environment ;
- providing accounting and financial documents, implementation reports on investment, employment national and foreign funding, to the competent authorities in accordance with tax laws.

Article 19 : Non compliance with signed commitments by accepted firms shall involve sanctions in accordance with the regulation in force.

Article 20 : The realization period of firm accepted by this law shall be set to five (5) years.Promoters whose projects have not started to be realised (Civil engineerring, acquisition of equipment materials) within the prescribed time, shall automatically lose the benefit from advantages and by the text of approval.

TITLE 8 : Arbitration

Article 21 : Disputes between one or several investors and the Government and relative to the validity, interpretation, implementation or revision of one or several clauses of the approval, shall be subject to a friendly settlement between the parties.When the investor is a national from another State, the arbitration procedure will be the one provided for by the March 18, 1965 Agreement creating the International Centre for Settling Disputes relative to Investment among States and Nationals from other States (CIRDI), established under the aegis of the World Bank and ratified by the Republic of Mali on January 3, 1978, unless the bilateral Agreements on the protection of investment set up by the government of which investors are nationals, exist.The consent is made up of this article, as far as the government is concerned ; it specifically set out in the application for approval, as for as investors are concerned.

The approval of Investment law also worth the approval of investment for the granting of any guarantee in the spirit of article 15 of the treaty creating the Multilateral Agency for Investment Guarantee : Disputes between one or several investors and the Government and relative to the validity, interpretation, implementation or revision of one or several clauses of the approval, shall be subject to a friendly settlement between the parties.When the investor is a national from another State, the arbitration procedure will be the one provided for by the March 18, 1965 Agreement creating the International Centre for Settling Disputes relative to Investment among States and Nationals from other States (CIRDI), established under the aegis of the World Bank and ratified by the Republic of Mali on January 3, 1978, unless the bilateral Agreements on the protection of investment set up by the government of which investors are nationals, exist.The consent is made up of this article, as far as the government is concerned ; it specifically set out in the application for approval, as far as investors are concerned.

The approval of Investment law also worth the approval of investment for the granting of any guarantee in the spirit of article 15 of the treaty creating the Multilateral Agency for Investment Guarantee (AMGI), signed by the Republic of Mali in october 1990.

TITLE 9 : Final Provisions

Article 22 : The current approvals from the promulgation date of this law, granted under the system of law n* 62-5 / AN-RM dated January 1962 from order n* 62-29 / CMLN dated March 23, 1969, from order n* 76-31 / CMLN dated March 30, 1976, from law n* 86-39 / AN-RM dated March 8, 1986, and which would not have been subject of an express abrogation, shall remain in force in all their provisions subject to endorsement and later modifications

Article 23 : This law, which abrogates any contrary prior provisions, notably law n* 86-39 /AN-RM dated March 1986, shall be recorded and published in the official magazine.




DECREE N*95-423 / P-RM

Laying down the means of enforcing Law n* 91-048 / AN-RM dated February 26, 1991, relating to investment law.

The President of the Republic,


Considering the Constitutin ;
Considering Law n* 91-048 / AN-RM dated February 26, 1991 relating to Investment Law ;
Considering Decree n* 96-048 / P-RM dated Juanuary 25,1996 laying down the administrative formalities for founding companies ;
Considering Decree n* 94-065 / P-RM dated February 4, 1994 relating to the appointment of a Prime Minister ;
Considering Decree n* 94-333 / P-RM dated October 25, 1994 relating to the appointment of Cabinet Ministers, modified by Decree n* 95-097 / P-RM dated February 27, 1995.

Ruling in Counucil of Ministers

DECREES

Article 1 : The modalities of enforcing Law n* 91-048 / AN-RM dated February 26, 1991 shall be laid down in accordance with the provisions of this decree.

SECTION 1 : About appoval Procedures

Article 2 : Applications files, for approval in relation to investment law, shall be submitted at the level of the single counter.

Article 3 : The firms establishment approval shall be accompanied by the following documents :

- an application stamped and sent to the Minister in charge of industries ;
- a feasibilitity study in five (5) copies prepared in accordance with the project presentation model,
- a copy of the authorisation to operate, should the occasion arise.

Article 4 : Application forms for approval, as well as the project presentation model, are available at the level of the single counter.

Article 5 : Promoters whose application files for approval in relation to investment law, are deemed to comply with the provisions of the above-mentioned article 3, shall receive delivery acknowledgement of receiot within the following twenty four (24) working hours.

Such an acknowledgement of receipt shall mention, among other things, the names and addresses of promoters, the subject of the activity, the system of investment law requested for the submission date of the files, and the legal date for granting the approval.

Article 6 : Application files for approval shall be submitted to a preliminary instruction which consist in checking the subject of the planned activity in relation to the field of implementation of the Investment Law.Files which results have not been conclusive shall be returned to thier promoters within seven (7) working days after the reception projects.

Article 7 : After receiving applications files for approval in relation to Investment Law, the Single counter shall prepare a data sheet, and shall be able to appoint any individual or legal entities, or any other structures which competence shall be deemed necessary for the examination of the given file.

Article 8 : After favourable notifications from the single counter, approvals shall be granted by a decision issued by the Minster in charge of Industry within a period of thirty (30) working days after receipt date of the file.
Only when there is non-compliance of the investment projects with legislative or statutory provisiondis in force, shall refusal to grant approvals be pronounced.

ARTCLE 9 : The decree of approval shall enumerate the advantages granted to promoters, the activities for which firms are approved, and shall lay down the obligations which are incumbent upon promoters.

Article 10 : Application files for authorising the setting up industries without advantages relating to Investment Law, addressed to the Minister Responsible for Industries, shall be delivery at the level Single Counter.
They shall include the following documents :

- An application stamped ;
- A feasibility study in two (2) copies.

Authorisation from the Minister in charge of Industry shall be granted through a decision within a fifteen (15) working day - period, stanting from the date of receipt of files.

Article 11 : Firms that are approved shall have to notify, through registered letters, the starting dates of their activities at the National Directorate of Industries and the National Directorate of Taxes in accordance with the provisions of article 16 from Law n* 91-048 / AN-RM dated February 26, 1991 relating to Investment Law.


SECTION 2 : About elements of appraising

Article 12 : Direct added values shall be the fundamental elements for appraising projects which are submitted for approval in relation to Investment Law.
Firms direct added values shall be defined as the sum of the following components of the trading accounts :

a) Staff costs
b) Taxes
c) Endowments to redemption
d) Financial costs
e) Gross operating profits

Their minimum rate accepted shall be 35% of the turnover.

Article 13 : Elements for appraising other than the one specified in the above mentioned article 12, and, which shall be used during the examination and evaluation of applications for approval, shall be the following :

a) the advantages investments are likely to bring to the State, to national entrepreneurs and to consumers,
b) contribution of external funding
c) the establishement of head offices in Mali
d) the level of integration of firms into the national economy
e) the effects of investment on trade balance
f) the effects on enviroment.


SECTION 3 : About the distibution into Zones

Article 14 : As implementation of the provisions of article 15 from Law n* 91-048 / AN-RM dated February 26,1991, relating to Investment Law, relative to decentralisation, the Malian territory is divided into zones as follows :

- zone 1 : the District of Bamako
- zone 2 : the Region of Koulikoro, Sikasso and Segou
- zone 3 : the Region of Kayes, Mopti, Tombouctou, Gao and Kidal.


SECTION 4 :About the system of Free Zones

Article 15 : Free enterprises shall be the ones which are subject to the system of the free zones as specified in article 14 Law n* 91-048 / AN-RM
dated February 26, 1991, relating to Investment Law.
This system shall apply to investments realised by promoters, whatever their nationalities, in activities mainly dealing with exports.

Article 16 : Free enterprises, within the framework of their activities, shall be exempted from taxes and duties, of a fiscal, exceptional tax, and customs nature.However, these enterprises, shall remain subject to the system of Customary Law concerning sales realised, on national territory.

Article 17 : Foreign Staff recruited by free enterprises shall be liable to a fixed system of gross income tax set at 15% of the amount of their remuneration.

Article 18 : Commercial relations between free enterprises and the enterprises established on the national territory, shall be governed by provisions relating to foreign trade.

Article 19 : Free enterprises, during their operation, shall have to comply with the following obligations
- the keeping of a production sheet
- the declaration, on a monthly basis, stocks concerning raw materials and consumable goods as well as finished products
- the protection of the environment
- supply of products on the Malian Market in accordance with Malian standards, should the occasion arise, with international standaards
- the relisation of infrastructures enabling the Administration to carry out the control of import, stocking, processing of inputs and export operarions of finished products
- collection and transfer of general income tax(I.G.R)
- the keeping of a full, honest and convincing accounting
- the keeping of a separate accounting for sales realised on the national market.

Article 20 : Files for the approval of free enterises shall be made up of the following documents
- an application atamped and sent to the Minister in charge of Industry and submitted at the level of the single counter ;
- a feasibility study in seven (7) copies specifying the subject of the activity, the name and address of the promoter, the location site of the enterprise, market research, financial analysis, employment plan.

Article 21 : Files of approval of free enterprises, after instruction, shall be examined by a commission made up of the representatives of the following services :
- the National Directorate of Industries Chairperson
- the National Directorate of Taxes Member
- the National Directorate of Economic Affairs Member
- the National Directorate of Customs Member
- the National Directorate of Health Member
- the National Directorate of Employment, Labour AND Social Security Member

The Commission shall upon the services of structures according to the nature of the projects on the agenda.The Secretariat shall be ensured by the Single counter.

Article 22 : The approval period for free enterprises shall be set to thirty (30) working days, starting from the delivery date of files.
Approvals of free enterprises shall granted by decree issued by the Minister Responsible for Industries.

Article 23 : Free enterprises shall be registered in Mali at the level of the National Directorate of Industries.


SECTION 5 : About Follow-up and Monitoring

Article 24 : The monitoring of the approved projects, in relation to investment Law, and the control by the commitments by investors, shall be ensured by the National Directorate of Industries which shall, should the occasion arise, appoint any technical service, to record its opinion on any area which may fall within its competence.

Article 25 : The non-compliance with the commitments subscribed by promoters of the approved projects in relation to investment Law, except force majeure, shall lead to a partial or total withdrawal of granted advantages after a formal notice not followed by any effect.The withdrawal of the granted advantages shall be issued by the Minister in charge of Industry through a decision.


SECTION 6 : About final provisions

Article 26 : This present decree shall abrogate any contrary prior provisions, natably Decree n* 91-079 / P-RM dated March 4,1991 relating to the means of enforcing law n* 91-048 / AN-RM dated February 26, 1991 relative to Investment Law.

Article 27 : The Minister of Industry, Arts, Crafts and Tourism and the Minister of Finance and Commerce are responsible, each in his domain, for the implementation of this decree which shall be recorded and published in the official magazine.

Bamako, December 6, 1995
The Prime Minister
The President of the Republic
The Minister of Finance and Trade
The Minister of Industry, Arts, Crafts and Tourism




PROJECT PRESENTATION MODEL FOR APPROVAL
IN RELATION TO INVESTMENT LAW


1. Summery and advantages requested from investment

2. Context and background of the project


a) Promoter (s) of the project : Name, address and business expeonce
b) and / or researches already carried out.
c) Background of the project Cost of studies

3. Market and enterprise capacity

a) Demand and market :
- Estimation of the size and capacity of enterprise (pointing out the main enterprises of the market, previous growth, estimating the next growth, pointing out the main development programmes), local scattering of enterprises, main problems and prospects of enterprises, general quality of goods ;
- Previous imports and future trends, volume and price ;
- Approximate volume of the present demand, its previous growth, main crucial factors and indicators ;
b) Sale expectations and marketing :
- possible competition faced by the project coming from similar local and foreign products ;
- Localisation of market (s) ;
- Sales programme ;
- Estimation of annual sales (local / foreign) of products and by-products ;
- Estimation of annual promotion cost of sales and marketing
c) Provisional programme of production :
- Products
- By-products
- Estimation of wastes its annual draining costs
d) Determination of enterprise capacity :
- Practical capacity of enterprises
- Quantitative relation between sales, enterprises capacity and materials used.

4. Materials used :

Approximate needs of production factors, present and possible situstion of liquid assets, estimation of the annual cost of materisl used, both from local and foreign sources :

a) Raw materials
b) Transformation industrial materials
c) Components
d) Secondary materials
e) Workshop supplies
f) Public services, electric energy in particular

5. Establishment site

Pre-selection by pointing out, should the occasion arise, the estimated cost of the of land.

6. Project technical file

a) Preliminary determination of the scope of the project
b) Technology and equipment.
- Technology and procedures applicable with regard to enterprise capacity
- Approximate estimation of local and foreign technology costs
- Main components of the equipment (production equipment, secondary equipment, service equipment, space parts, tools)
- Estimation of the cost of the above-mentioned equipment
c) Civil engineering works, construction and planning :
- Preparation and planning of the plot of land
- Building and special works
- Planning and installations
- Estimation of the cost the above-mentioned civil engineering works.

7. Enterprise organisation and overheads

a) Organisation scheme
- Production
- Sales
- Addministration
- Management
b) Estimation of overheads
- Manufacture
- Administration
- Finances

8. Labour

a) Estimation of labour needs, distributed between implementation and managerial staff, and the main speciallities.
b) Estimation of labour annual cost, classified as mentioned above including overheads of salaried.

9. Timeline for project implementation

a) Expected timeline for project implementation
b) Estimation of project implementation cost depending on the programme expected

10. Financial and economic assessment

a) Total investment costs :
- Estimation of the working capital needed
- Estimation of fixed assets
- Total investment costs (sum of estimated investment costs specified in section 2 to 10)
b) Project funding
- Structure of the capital expected and the funding proposed
- Interests
c) Production cost :
(recapitulation of the estimated production costs specified in section 2 to 10, disrubuted between fixed charges and variable expenses during a period exceeding at two years, the exemption period)
d) Calculation of selling price :
Financial assessment based on the above mentioned estimation values :
- Break-even point
- Internal profitability rate
- Value-added rate.



ANNEX
SOME CALCULATION ELEMENTS


1. Calculation of staff costs :

a) Total wages bill : total amount of salaries paid to the staff
b) Social charges : 23% of the total wages bill
c) Staff costs : total wages bill + social charges

2. Calculation of tax :


a) Road tax discs
Rates of tax on motor vehicles are set as follows :
- Motor cars :

From 2 HP to 6HP 7,000 CFA francs
From 7 HP to 9 HP 13,000 CFA francs
Frpm 10 HP to 14 HP 32,00 CFA francs
From 15 HP to 19 HP 50,000 CFA francs
Starting from 20 HP 75,000 CFA francs

- Two or three-wheeled motor vehicles

Over a capacity of 125 CCS 7,000 CFA francs
Over a capacity of 51 CCS 4,000 CFA francs
Over and under a capacity of 50 CCS 2,000 CFA francs

b) Fixed rates : 7,5 of the total ages bill.
c) Licence rates : fixed duties (DF) + Ad Valorem duties (DP)

Fixed duties are determined according to zones and categories (cf General Tax Law) : ad valorem duties equal to 10% of rental values (VL) and equal to 5% of asset values (VA)

Asset value - civil engineering + arrngemant and installations + production equipment fixed at ground level

Hence, DP = VA 5% x 10%

d) Tax on "biens de main morte" (TBMM)
It equals 20% of the lowered rental value (VLA) or land income which itself equals 60% of the rental value.

VLA = land income x 20%
So : TBMM = VLA x 20%
SUMMARY OF TAXES

Designation Year 1 Year 2 Year 3 Year ... Year10
Tax discs          
Fixed rate          
Licence rates          
Rate on services          
Licence contribution          
Housing tax          
Tax on "biens de main morte"          
Total          

e) Tax on land income :
Same calculation basis used as tax on "biens de main morte". Its rate is presently 20% of land incomede 20% du revenu foncier. of land income
N B : Licence rates, tax on "biens de main morte" and tax on land income enjoy fiscal exemptions (cf Investment Law).

f) Other tax :

A single rate of added value / value added tax of 18%
N B : Concerning the application of any of the rates, please consult the General Tax Law.

Tax on Services (TPS) linked to services : the applied rates are :
-Normal rate = 15%
-Reduced rate 7%

Tax on Industrial and Commercial profite (BICS) :
- Concerning companies : 35% of the working income
- Concerning individual enterprises, collective name coompanies, GIE'S, etc. : 15% of the working income
- Concerning the calculation of working income, see table of trading accout forecast.

Table of annual amortization :
Description Amortization rates
Initial outlay 33.33%
Civil engineering-constructions 5%
Production equipment 10%
Rolling equipment ( light or heavy ) 33.33 or 20%
Rolling stock ( light or heavy )  
Materials and office furniture 20%

3. Provisionnal operating accounts

Years
Description
1 2 3 4 5... 10
1. Revenues exclusive of tax (H.T)            
Operating expenses            
Raw materials            
Packing            
Staff costs            
Taxes            
Works, supplies and external            
services (TFSE)            
Management & various            
expenses (FDG)            
Transportation and travel            
Internet charges            
Financial Fees            
2. Total charges            
3. Gross results (1-2)            
4. Land income            
5.Operating income = (3-4)            
6. Tax/BIC            
7. Tax/land income            
8. Net results = 3-(6+7)            

NB : Concerning all tax includes (TTC) receipts, you should incorporate the TVA into the charges :
- Tax / BIC : 15 or 35% of operating income
- In case the gross result is negative, BIC tax represents 0.75% of the turnover
- Enterprises which are eligible to Investment law enjoy a period of tax exemption from industrial and commersial profits (BIC).

4. Provisional treasury plan

Years
Description
0 1 2 3... 10
A. RESSOURCES          
Personal contribution (or shareholder's equity)          
Borrowings          
Amortisation          
Net results          
TOTAL A          
B. EMPLOYMENTS          
Investments and renewals of          
working capital          
Fluctuation of working capital          
Reimbursement of borrowings          
TOTAL B          
Released treasury A - B          
Cumulative treasury          

NB : year 0 corresponds to investment years

5. Value - added rates


Years
Description
0 1 2 3 4 5... 10
A. Value-added (VA)              
- Staff costs              
- Tax (including the VAT)              
- Amortization              
- Financial fees              
- Net profits              
TOTAL A              
B.Turnovers (CA)              
C. Value-Added rates
(TVA = VA/CA X100%)
             

6. Some indicators of prices and tarifs :

- Electricity
The tarifs applied to power over 25 kilowatts are the following (average tension) :
Batch 1 : 98 CFA francs a kilowatt-hour
Batch 2 : 70 CFA francs a kilowatt-hour
Batch 3 : 43 CFA francs a kilowatt-hour

- Water
The following tarifs are applied
Industrial water at 322 CFA F / m3
Regular petrol 480 CFA francs a litre
Diesel fuel 375 CFA francs a litre
Paraffin 250 CFA francs a liitre