Some legal practitioners in the country have been found wanting in meeting tax obligations to government through greatly undervaluing their earnings to evade full tax payment.
The latest report of the Commission of Inquiry into Tax Evasion and other Corrupt Practices has revealed that just ten lawyers have denied the government more than D20.7 million in revenue, an amount they should have paid as tax but failed to do as a result of under-declaration of income earned.
After four months of investigations, the Tax Commission has revealed that most of the people found wanton were greatly under-declaring their income earned over the years, with many lawyers falling under this category.
Justice Mama Fatima Singhateh, chairperson of the Commission, explained how the Commission came to this conclusion. “Our methodology for reaching this conclusion is based on their seniority at the bar and their fair market value (as defined in Section 4 of the Income and Sales Tax Act) of the services provided in this field.
“We therefore randomly reviewed the income declared of a lawyer of 16 years legal standing and compared the income declared and tax paid in any given year and found out that it was more than the income declared and tax paid for a lawyer of 32 years standing at the bar on similar services.”
However, Justice Singhateh pointed out that there is no conclusive proof to support this other than the fair market rule under the Act.
The Commission, therefore, strongly believes and firmly concludes that there is a case of serious under-declaration of income earned with a view to evade the payment of taxes, and recommended a thorough and detailed inquiry and investigation to be conducted on this point to ascertain the magnitude of under-declaration of income by taxpayers.
Like the lawyers, individual professionals and institutions are also blamed for causing huge loss of revenue to the government through under-valuing their incomes.
Apart from lawyers, the other people allegedly guilty of “professional stealing” is the medical professionals seven of whom have a total outstanding amount of tax debt of more than D5.3 million.
Seven consultants and engineers are also said to have caused government the loss of more than D15.2 million for similar reasons to those of the lawyers and doctors.
As regards institutions, the Tax Commission’s report states that six insurance companies have made government to lose over D98.5 million, and twelve hotels over D439.5 million.
The report of the Commission also revealed that the Gambia government lost over D2.5 billion (more than US$95 million) as a result of tax evasion and failure to pay correct tax, due by 50 selected taxpayers, including the above-mentioned ones, who were re-assessed on income, sales, and PAYE (pay as you earn) taxes.
According to the three-volume report, corruption, negligence and nonchalant attitude by some officials of the Gambia Revenue Authority (GRA) in tax administration contributed to the huge economic loss.
Presented to the Gambian leader, Yahya Jammeh, on 6 June at State House in Banjul, the report exposed serious flaw in the assessment process and procedures adopted by the GRA, which is depriving government of large amount of much needed revenue.
Central Bank blamed for loss of over D21 million to government
It is also stated in the report that the Central Bank of The Gambia as the institution of government responsible for supervising the banking industry, did not appear to have instituted adequate measures to stop the rampant malpractices of accepting payment of government revenue by personal cheques.
Up to 2011, the total of dud cheques outstanding as at December 2011 was D21,412, 085.53, which could have been completely avoided if certified cheques were accepted for payment of taxes.
Established in October 2011, the Tax Commission’s report was prepared after four months of investigations during which it inquired into tax evasion and other corrupt practices of accountants, legal practitioners, engineers, medical practitioners, private persons, institutions, construction companies, GSM companies, hotels and other types of companies and businesses required to pay tax to the GRA - the institution tasked with the responsibility of revenue collection for the state.