The Gambia Revenue Authority has been tasked by both members of the public and private sector to re-engage the business community, especially net importers in a thorough or detailed explanation on the teething problems emanating from the introduction of VAT on January 1 this year.
In an interface meeting held yesterday at the Kerr Jula Complex of the Gambia Chamber of Commerce and Industry (GCCI) in Kerr Serign to discuss the post-implementation issues of the Value Added Tax (VAT), such as the rapid increase of prices of commodities in The Gambia, members of the private sector and GRA commissioners frankly and earnestly exchanged views on the problem of skyrocketing prices hitting the nation these days.
The discussion, organised by GCCI under the leadership of Almami Fanding Taal, CEO of GCCI, was participated in by members of the GCCI, Trade Ministry's officials such as Permanent Secretary Naffie Barry, GRA's acting-Commissioner General Yankuba Darboe and Commissioner of Taxes Essa Jallow, as well as a cross-section of members of the private sector.
Whilst GRA officials were denouncing the new wave of price hikes in the country on account of the VAT, members of the private sector were arguing the fact that the VAT has some financial burden on them leading to the slashing of their usual profit margins when it was meant to replace sales tax and nothing more.
"The introduction of VAT should not lead to a general increase in the prices of goods and services; VAT is just a replacement sales tax at the same rate of 15%," Essa Jallow, Commissioner of Domestic Taxes at GRA, argued, saying that VAT has no cascading or negative effects on any economic or business activity neither can it lead to price rise.
There is no justification for the business people to increase prices of their commodities because of VAT, said Acting-Commissioner General Yankuba Darboe, adding that the business community has been engaged in series of intensive discussions months ago before the introduction of the VAT to let them know it is a mere replacement of Sales Tax.
Another salient point raised by the Chief Executive Officer of GCCI, Almami Fanding Taal, is that attention is placed too much on the VAT as the main causative factor of the price increment in the country when there are other factors such as foreign exchange rate such as the increasing exchange rate of the US dollar, the Euro and the Pound Sterling against the Gambian dalasis.
However, even though technical issues as regards the charges or ratings of VAT were raised by members of the private sector to defend the increase in prices, the fact still remains that certain businesspeople are taking advantage of the VAT to increase the prices of their commodities unscrupulously when they are not affected by the new tax system, either because they are not registered, or their business turnovers are below the threshold for compulsory or voluntary registration.
These businesses should not charge VAT on their goods or commodities, said Ag-commissioner-general Darboe.
After a lengthy discussion or dialogue, it was resolved by all and sundry at the interface meeting that GRA has to do their homework thoroughly by re-engaging business people, especially net importers, in a systematic explanation to ensure they understand the details of the VAT and apply the tax properly without causing harm to consumers, who actually pay the tax at the end of the day.