The Gambia Revenue Authority GRA, the body tasked with the responsibility to enhance efficiency in tax administration so as to harmonize and optimize revenue collection, has registered about D3.8 billion revenue in 2009.
Pic: Gambia Revenue Authority Building
The 2009 activity report of the Authority, which was recently presented to the National Assembly Public Accounts and Public Enterprise Committees, has it that the 2009 revenue exceeds the Ministry of Finance’s target for the Authority by 3%.
“GRA registered an absolute revenue increase of D422.5 million representing a 13% revenue growth. This indicates a remarkable increase in collection capacity relative to the previous year,” says Bakary Sanyang, Acting Commissioner General of GRA, while presenting the Authority’s report at the National Assembly.
The improvement in the revenues for the current year was significantly influenced by collections on oil products made by the Customs and Excise Department.
Mr Sanyang said: “The oil revenues accounted for more than 30% of the overall revenues for CED [Customs and Excise Department] in 2009. CED contributed about 60% of the GRA revenues for 2009 whilst Domestic Taxes Department accounted for the remaining 40%. The above revenue contribution ratio indicates the important role that international trade taxes continue to play towards our domestic revenue mobilization efforts.”
The Ecowas Trade Liberalization Scheme and the Economic Partnership Agreements, which will give duty-free access to imports originating from the ECOWAS region and Europe when fully implemented, is believed to have the potential of significantly eroding the national revenue base.
The revenue growth for 2009 was underpinned by low oil prices for the most part of the year due to the global economic crisis and an effective enforcement of the revenue laws, Mr Sanyang says: “CED registered a revenue growth of about 35% between 2008 and 2009 which was significantly influenced by the improved collection from the oil products. The global economic recession affected the performance of businesses that are dependent on tourism. The recession was also associated with a drop in the inflow of remittances.”
He added that external shocks have led to a shortfall of 17% registered by the Domestic Taxes Department against its annual target.
Domestic revenue mobilization faces a falling re-export trade and an expanding informal sector with a low level of tax compliance. “To strengthen tax administration in the informal sector,” the GRA acting DG said, “the 2007 Informal Sector Regulation was promulgated, which provides for specific amounts that informal sector businesses are required to pay. This is an important step in expanding the tax base.”
According to Mr Sanyang, revenue collecting system continues to receive the attention of the Board and Management of GRA to ensure that revenue collection is maximised through the efficient and effective administration of taxes.
“The Authority continues to register a positive revenue growth since its inception in 2007 with revenues growing by 17.5%, 13%, and 12.6% for 2007, 2008, and 2009,” he stated, adding: “GRA has registered an average annual revenue growth of about 10.5% in the first three years of its operation making it among the best performing revenue authorities in Africa.”
The Gambia government, with support from its development partners, continues to evolve sound revenue policies aimed at strengthening the capacity of GRA to enforce the revenue laws.
According to Mr Sanyang the restructuring and modernization of the Authority, since levels and revenue collecting agencies were merged, has resulted into higher compliance levels and revenue yields. The current revenue-to-GDP ratio of 19% is among the highest for taxing the final output of goods and services produced in the economy.
“Achieving such a high revenue ratio in a country like The Gambia where the agricultural sector which makes a sizeable contribution to GDP and employment makes a negligible contribution to tax revenues is a mark of success for GRA,” he says.
As the main revenue collecting agency for the government, the GRA’s collection for 2009 accounted for about 83% of the revenues estimates and 71% of the estimates for expenditure and net lending in the government’s budget for the year.
The Authority is committed to ensuring that it plays its rightful role in mobilizing the required financial resources for the realization of financial independence, sovereignty and the Vision 2020. Its Board and Management would continue to put emphasis on meeting both the domestic and international obligations of the Authority, report presented by Mr Sanyang states, adding that the security objectives of the Authority continue to be pursued with vigour to control the entry of prohibited and restricted imports.
He explained further: “GRA has now put in place the requisite institutional mechanisms for the proper administration of taxes in the country. This process has ushered in a sound modernization programme aided by our 2008-2010 Corporate Plan leading to the strengthening of the tax administration system. Operational documents and procedure manuals continue to guide the administration of taxes.”
The Authority’s reforms are focusing on the preparation of a new customs and excise legislation, the adoption of the WTO Valuation Agreement, Migration from ASYCUDA 2.7 to ASYCUDA++, implementation of GAMTAXNET and VAT.
The Authority has also endeavoured to continue with the strengthening of its internal environment by deepening its revenue administration reforms to positively influence the institutional and human factors that affect its performance.
Said Mr Sanyang: “The evolving economic policies of the country and the stable political environment provide hopes for the expansion of the revenue base. Therefore, tax administration efficiency; sound economic, political, and trade policies; the removal of border obstacles by neighboring Senegal; and the continuous support of development partners will determine the revenue collection horizon of the Authority .
“The foregoing highlights the extricable link between the performance of GRA and its internal and external environments.”
In pursuit of the creation of the right atmosphere for increased revenue mobilization, the Authority continues to constructively engage its stakeholders within and outside the country.
The Sub-regional and multilateral organizations, mainly ECOWAS, IMF, WCO, WTO and World Bank, are rendering assistance to GRA on the strengthening of its tax administration system.