The Gambia Revenue Authority (GRA) on Thursday, 10th January 2013, held a press conference to brief the media on the implementation of Value Added Tax (VAT) in The Gambia.
According to the Commissioner of Domestic Taxes at GRA, Ensa Jallow, the implementation of VAT in The Gambia is part of the tax reforms embarked upon by the country's Public Financial Management Reforms and ECOWAS Member States and that the reforms entail a shift from the sales tax to Value Added Tax.
According to Mr Jallow, the Gambia has undertaken to implement VAT by January 2013 in fulfillment of its commitment towards the ECOWAS Value Added Tax Protocol adding that "VAT is a modern indirect tax levied on the consumption of taxable supplies of goods and services at various stages in their production and distribution and on imports."
The Commissioner of Domestic Tax said "VAT is a more broad based consumption tax than the current Sales Tax and that it has no cascading effect and is good for the promotion of both domestic and international competitiveness and that the introduction of VAT should not lead to a general increase in the prices of goods and Services since it replaces sales tax at the same rate of 15%."
Mr Jallow said the general price increases cannot be justified as most of the goods that are now subjected to VAT were previously subjected to sales tax at the same rate.
He said VAT should only be charged by businesses registered and issued with a VAT registration certificate by the GRA and that the registration certificate must be prominently displayed at the business premises.
The Domestic Tax Commissioner stressed that Customers should ensure that businesses without a VAT certificate do not charge them, adding that VAT is not an additional cost for registered businesses, as they are not liable to sale tax payment and are entitled to an input tax credit for the VAT paid on their purchases, imports and operating expenses.
Commissioner Jallow continued to explain that the input tax credit is claimable monthly during the time of tax returns processing and that businesses not registered for VAT are not required by law (Income and Value Added Tax Act 2012) to charge VAT on their supplies of goods and services.
He went on to say that registered businesses are required to issue VAT invoices every time there is a sale of goods and services to VAT registered businesses and that if not provided, customers should ask for their invoices and the invoices must clearly state the amount of VAT that has been included in the total sale price and the VAT registration number.
According to Commissioner Jallow, registered retail businesses are required to issue VAT receipt every time there is a sale of goods to VAT customers and if not provided, customers should ask for their receipt if needed and that the VAT receipts must clearly state the amount of VAT that has been included in the total sale price and the VAT registration number.
Continuing his statement, Commissioner Jallow said all prices of goods and services displayed and quoted by VAT registered businesses must be VAT inclusive and that VAT should not be an additional charge added to the advertised price nor should the payment of VAT be negotiated over the counter by the customer and sales agent.
In conclusion, the GRA Domestic Tax Commissioner said the basic foods like rice, sugar, oil, flour, basic bread, fresh fish, fresh meat, fresh vegetables, maize, sorghum, millet, fruit and infant food etc. are exempted from VAT and that no business should charge VAT on these goods hence no price increases are expected.