|By Lamin Jahateh, Banjul|
The government of The Gambia has agreed to further reduce the corporate tax by 1 percent, from 33 percent to 32 percent, following a two percent reduction in 2010, from 35 percent to 33 percent.
As an incentive for voluntary compliance with business and tax laws and regulations, including keeping of proper books of accounts, government says subsequent reductions in corporate tax will only be applicable to businesses that have satisfactorily submitted audited accounts for the preceding year to the Gambia Revenue Authority (GRA).
“However, the private sector should be ready and willing to provide equity capital and bear part of the risk, without which the required investments for infrastructure and agriculture cannot be realize,” Hon. Abdou Kolley said while delivering the 2011 budget speech.
He said: “Government has also stepped up measures to further enhance the performance of the financial sector, which is a key ingredient in creating conducive environment for the private sector. For instance, CBG is in the process of establishing a more efficient payment system infrastructure, including a Real Time Gross Settlements System (RTGS), an automated Cheque clearing a system and a National Switch. CBG is also working with Development Partners to acquire an Electronic Analysis and Surveillance (e-FASS) software, aimed at facilitating a faster and accurate submission of returns by banks electronically.”
Government continues to recognize the private sector as a key partnership in the development process. Moreover, with the prospects of a Program for Accelerated Growth and Employment (PAGE), the private sector has a role to play in the development of infrastructure and agriculture among others.
The Finance Minister recalled that in the past government has offered several incentives to the business community but “these benefits have, in many instances, not translated into increased production and productivity, employment generation or meaningful reduction in prices”. “This one-sided partnership has to change if the ideals of a private sector led growth are to be realized,” he said.
He noted that fiscal incentives are not meant to be permanent, but to facilitate the growth and development of a business and addressing specific development concerns.
The government has committed itself to create an environment conducive to private sector growth, but it will be up to private sector operators to seize the opportunity so that together this country can move forward, he said.
Economic growth and development of any nation depends to a large extent on a vibrant private sector. The time has come for the private sector to be more proactive, more enterprising and forward-looking and willing to invest with a long term perspective.