17 January 2013

Gambia: Stakeholders Hold Awareness Forum On Implementation of the VAT

The Gambia Chamber of Commerce and Industry (GCCI) in collaboration with the Ministry of Trade, Industry, Regional Integration and Employment (MOTIE) on Tuesday, 15th January, 2013 held a sensitisation forum at the GCCI Secretariat, Kerr Jula, at Bijilo in a bid to create more awareness on the implementation of the Value Added Tax (VAT).

In her statement, Madam Naffie Barry, the Permanent Secretary of MOTIE said her ministry is being tasked with following up the implementation of the recommendations of the National Economic Summit held on January 8, 2013. She expressed the concern of her ministry over the recent increases in the prices of essential commodities particularly food stuff as a result of the introduction of the VAT which prompted this interface between the public, the private sector and her ministry.

PS Barry said VAT is not intended to create an unfavourable business atmosphere in the country, adding that the Government will not punish the people by levying taxes on them twice. She explained that VAT is not another tax in addition to the then sales tax but a replacement.

She noted that the developmental issues should be the concern of everyone but that she said not all private sector operators are presence in this importance forum.

For his part, the Chief Executive Officer of the Gambia Chamber of Commerce and Industry Almamy Fanding Taal noted that all taxes levied on goods including and VAT are borne by the consumers. He expressed concern as to whether VAT will not reduced the purchasing power of the consumers.

Regarding the increases in prices, Mr Taal noted that tax is not the only factor that determines the increase in price but also the exchange rate of the trading currencies which have appreciated against the Dalasi.

Mr. Yankuba Darboe, the Acting Commissioner General of the Gambia Revenue Authority (GRA) reiterated that VAT is not an additional tax but instead a replacement of the previous Sales and Excise Tax.

He said the introduction of VAT should not lead to a general increase in the prices of goods and Services. "VAT replaces sales tax at the same rate of 15% and that the general price increases cannot be justified as most of the goods now subject to VAT were previously subject to sales tax at the same rate", said Mr. Darboe.

The GRA Acting Commissioner General noted that 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.

He emphasised that customers should ensure that businesses without a VAT certificate do not charge them VAT.

"Businesses that earned over D1,000,000(One million Dalasi) are required by law to register and those who earned D500,000(Five hundred thousand Dalasi) registration is optional", he said.

In his remark, Mr. Ensa Jallow, the Commissioner of Domestic Tax at GRA, said VAT is not an additional cost for registered businesses as they are not liable to sales tax payment, adding that they are entitled to an input tax credit for the VAT paid on their purchases, imports and operating expenses. "The input tax credit is claimable monthly during the time of tax returns processing", he said.

He also stressed that businesses that are not registered for VAT are not required by law to charge VAT on their supplies of goods and services.

"Registered businesses are required to issue VAT invoices every time there is a sale of goods and services to VAT registered businesses. If that is not provided, customers should ask for their invoices. The VAT invoices must clearly state the amount of VAT that has been included in the total sales price and the VAT registration number", said Commissioner of Domestic Tax.

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