Value Added Tax Act enacted
Thursday, June 28, 2012
A Bill entitled ‘An Act to repeal the Income and Sales Tax Act, No.19 of 2004 (as amended) and enact the Income and Value Added Tax Act, 2012 to revise the laws relating to income tax and value added tax and for connected matters’ was on Wednesday unanimously amended by National Assembly members.
The 201-page VAT Bill 2012 seeks to bring about a new dispensation in tax administration and in so doing repeal the existing Income and Sales Tax Act, No. 19 of 2004.
Bill before members, Abdou Kolley, the minister of Finance and Economic
Affairs, said the introduction of VAT in the fiscal year 2013 is one of the
vital public financial management reforms currently being undertaken by the
government of The Gambia. His words:
“The VAT will be replacing the current Sales Tax, and lead to the broadening of
the tax base, ensure the collection of the optimum tax from sources thereby
increasing tax revenues.
“Within our efforts to introduce the VAT, we are also aligning our objectives with the Ecowas VAT Protocol that our Government has committed itself to. All Ecowas member countries have already introduced the VAT, with the exception of The Gambia and Guinea Bissau.”
Minister Kolley told the NAMs that VAT is a key component of the tax system of over 120 countries worldwide, raising one-fourth of the world’s tax revenues. He said its introduction would address issues regarding the non-maintenance of a standardised record keeping system, as we have today. He explained that under this tax regime, VAT invoices, credit notes and debt notes are issued to consumers/recipient at the time when a taxable product is supplied.
continued: “Just like the business registration, a new VAT registration process
shall be administered to allow all eligible taxable persons/businesses to apply
for VAT. Every registered person will be given a certificate of registration
indicating his name, taxpayer, identification number (TIN), location of
business/branch and the effective date of registration.”
and Economic Affairs minister revealed that the VAT rate is set at 15%, the
same as that of Sales Tax, which it is replacing. He said that within the
current Sales Tax system, most items have a set rate of 15% with the exception
of the Telecommunication industry, where Sales Tax rate is set at 20%.
“With the VAT rate to be set at 15% this will likely lead to losses in revenue towards the purchase of telecommunication credits (scratch cards credits), whereby government was previously earning 20% Sales Tax on every scratch card purchased,” he further stated, adding that under this new tax, goods and services that are taxable and non-taxable (exempted) are clearly determined.
the motion, Hon. Lamin K.T Jammeh, NAM for Illiasa Constituency said the Bill
is non-controversial, stressing that anything that will consolidate tax
collection should be given due attention.
Hon. Seedy S.K Njie, a nominated member described the Bill as very important as it will help the government in collecting the maximum tax for the interest of all Gambians. He further described the Bill as another demonstration of government’s commitment to the welfare of its citizens.
Hon. Fabakary Tombong Jatta, the Majority leader and NAM for Serrekunda East noted that the VAT will ensure there is fair, equitable, and transparent collection of tax. He said it is the duty of every Gambian to pay tax, adding that the Bill is long overdue.
Others who contributed to the approval included included Hon. Pa Malick Ceesay, NAM for Lower Saloum and Hon. Kalipha Jammeh, NAM for Bakau.
Author: Alieu Ceesay & Aji Fatou Faal