ANALYSIS: DAILY OBSERVER AND GRA: A CASE OF TAX JUSTICE IN THE ADMINISTRATION OF NATIONAL TAXES

Mamos Media

By Dr. Assan Jallow

Thanks Madi Jobarteh and Eden Sharp for sharing an insightful take on the issue of Daily Observer (DO) and Gambia Revenue Authority (GRA). First of all, let me make a disclaimer here that the views expressed are strictly mine and does not represent that of the GRA. In addition, let me equally add my voice to clarify that the GRA did not ordered DO to cease operations, but rather place it under ‘temporary closure’ of fourteen (14) for the benefit of your readers. It may interest readers to know that the GRA has a de jure powers to administer, collect and enforce taxes based on the Gambia’s laws of taxation as enshrined under the Gambia Revenue Authority (GRA) Act, 2004. In so doing, it can both utilise the carrot and stick mechanism, at various lengths depending on the nature of the tax crimes, whether it was intentionally or deliberately committed by the defaulting taxpayer, the business entity or corporate body under the disguise of extreme tax planning, tax avoidance or evasion. These three have a correlation in impacting on revenue generation, hence eroding the potential tax base of an economy. I will discuss more on these in another segment or perhaps in a form of a research in the near future.

So let me direct my focus on the closure of #DailyObserver by the taxing authority (GRA), which seems to occupy the minds of every concerned Gambian and trending on social media (Facebook), the print and electronic news on the recent actions of GRA one part and the negligence of the DO on the other hand for allowing itself in accumulation of such huge amount of tax debt over the years. Situation like this creates a platform of mind-clashing and debates as a result of either rational expectations or irrational exuberance as people express their opinions and views differently as it deals with law and morality. But, we must distinguish between law (i.e. what is established and should be followed) and morality (i.e. showing some kind of remorse to someone or an entity that deliberately or wilfully committed a serious tax crime). To set the record straight, taxation is an instrument of fiscal policy which is the life wire of modern states that are naturally disadvantaged or endowed with no natural resources like oil. It is a necessary evil and does not look at faces of individuals, businesses (i.e. trusts, partnership) or body corporates to levy the compulsory impost on behalf of the government, through its assigned institution or agency. This makes the payment of taxes legally binding and compulsory for those qualified under the set thresholds or income brackets to honour such obligations without any form of ‘qui pro quod”, i.e. expectations of a direct benefit in equation for such payments from the public purse. To simply put this into context, taxes are required to be paid when due and no one or entity must try to create illegal ingenuity in the forms of extreme tax avoidance schemes to dodge the payment of taxes or to moralise a legal requirement through collusion or political influence, as no one escapes the tax man, because in life the two permanent things that are certain and we must face during our existence on earth are: death and taxes. It behoves us all to meet our legal obligations in the payment of taxes because tax due has priority over all other debts of the taxpayer and therefore sanctions the act of “omnia praesumuntur rite et solemniter esse acta takes precedence over everything in matters of taxation.

Allow me to highlight a little about GRA as an agency or institution of the government under the watchful eyes of the Ministry of Finance and Economic Affairs. The GRA as a body corporate is with perpetual succession and a common seal that was created by an Act of Parliament in 2004 and may (a) enter into con enter into contracts; (b) sue and be sued in its corporate name. This is part of enhancing the acts of justifiability and in helping to ward-off political interference, ensue integrity and a high degree of fairness and professionalism in its functional mandates, and (c) do or perform all other acts and things that a body corporate may do or perform; and (d) exercise the rights, powers and privileges and incur the liabilities and obligations of a natural person of full age and capacity. These above provisions are provided by the GRA Act 2004 and the GRA (Amendment) Act, 2010, respectively. The authority is vested with a collection, administration and enforcement powers to execute its functions and mandates and shall have such powers as are necessary to enable it perform its functions judiciously and do such other things as are necessary or incidental to the proper performance of those functions under this Act, as stated in section 15 of the GRA Act, 2004. The functions of the Authority are clearly stated under Section 14 (1) of the GRA Act, 2004 and this includes: (a) assess, charge, levy and collect all revenue due to the government; (b) ensure that all revenue collected is, as soon as reasonably practicable, paid to the Consolidated Government’s Fund; (c) administer and enforce the Gambia Revenue Authority Act and the revenue laws; d) Promote full compliance with tax laws; (e) take such measures as may be required to improve the standards of service provided to the taxpayers with a view of improving efficiency and effectiveness in administration, and maximising revenue collection; ( f) take such measures as may be required or considered necessary to prevent tax fraud and other tax evasions; (g) advise the Minister of Finance on matters relating to the administration and collection of revenue under The Gambia Revenue Act and the revenue laws, and (h) perform such other functions, in relation to revenue, as the Secretary of State now changed back to Minister of Finance as the new nomenclature, proposed. In a similar vein, the said provisions of s.14 (2) also states that the Authority (GRA) shall perform its functions, inter alia as: – (a) in the most cost efficient and effective manner possible; (b) under the revenue policy set by the Secretary of State (Now changed to the title of a Minister); and (c) subject to such orders, directions, directives and guidelines on policy, financial and administrative matters as may be issued by the Secretary of State (now Minister), from time to time.

The GRA does not take the laws on its hands in exercising or administering the laws of taxation on individuals, trusts, partnership and body corporate (business entities). These laws are very clear in design although technical in some aspects, but the current management understands fully their roles in the performance of their duties in ensuring the dividends tax administration and revenue administration are effectively and efficiently realised for the public good. To expatiate, the closure of Daily Observer is guaranteed by a provision of the Income and Value Added Tax Act (IVATA), 2012 under S 215 (1 – 5) known as “Temporary Closure of Business. Under S 1 of the IVATA, if a taxpayer- (a) fails to pay the Commissioner General any Value Added Tax; (b) fails to pay to the Commissioner General any tax deducted from a payment of employment income under section 89; or (c) repeatedly fails to pay income tax on or before the due date, the CG may, by notice in writing, inform the taxpayer of the CG’s intention to close down part or the whole of the taxpayer’s business for a temporary period not exceeding fourteen days unless the taxpayer pays the tax due within a period of seven days of the day of notice. This notice that will be affix on the taxpayer’s premises will read as follows: WARNING: CLOSED TEMPORARILY UNDER SECTION 215 OF THE INCOME AND VALUE ADDED TAX ACT FOR NOT PAYING TAX”. Once the taxpayer in question pays the due tax within the period of the closure notice, then the CG shall immediately arrange for the removal of such notice as earlier alluded. Therefore, the above highlighted are the powers vested to the revenue administration to execute its due functions in events where the Authority has exhausted all the enforcement mechanism to recover tax owed to the state by a defaulting taxpayer, business or corporate body over time. It is not a final closure of the business and the GRA has no intention to cause an insult to an injury in moments like this.

The GRA pride herself as a partner in development with genuine businesses and has spearheaded reforms in ensuring that businesses are formally established and structured within the formal economy, all geared to keep the economy vibrant and growing, so that employment opportunities can be created and provided to our teeming unemployed youthful population and equally as an incubation point for revenue generation so that government can be able to provide valuable social programmes to the citizens and residents. So many of us are of the view that the recent action of GRA on DO is politically motivated! It is not to the best of my knowledge as the company in question has been defaulting since time immemorial and GRA had engaged the management of the paper (DO) on several attempts to address the increasing pile of their bloated tax debt or arrears, but the management of company turned deaf years. This is not a witch hunt but rather a wake-up call for all individuals, businesses and companies that business will never be as usual, under our current political dispensation as the GRA has resolved to capitalise on the dividends of our growing democracy to exercise its inherent and ‘de jure’ powers, and ensure that every taxpayer pay his or her fair share of taxes according to the Laws of Taxation. Many are concerned with unanswered questions as to why GRA did not enforce its laws on the onset and waited for so long a years before executing the long arm of its inherent powers, after the company (DO) has accumulated around D17 millions? These are questions that need answers from the side of the revenue authority (GRA). Perhaps, it could have been as a result of the politicisation of the tax administration and out of fear for the officials to take the bull by the horn. These were uncharted routes to pursue, understanding fully that The Gambia was under the leadership of a brutal dictator and then trying to play the rules of the game in accordance to law has always been inflicted with a heavy price to pay for individuals and their loved ones.

However, a new chapter has begun and this move must follow suit to all the defaulting taxpayers and corporate institutions, particularly public enterprises in the payment of employment incomes (PAYE). This is a NEW Gambia that must not harbour criminals in the tax system who uses the hand of collusion to defraud the state. There is the need for an enhanced operational efficiency on tax administration, collection and enforcement and possibly in creating a tax amnesty programme given the fact that our country has a chronic history of non-compliance in the realm of paying taxes, where taxpayers’ have adopted systemic avoidance schemes in arranging their tax affairs as a result of the presented loopholes on the tax system and its laws. The rationale behind the recommendation for the tax amnesty programme is to pardon or negotiate the tax liabilities of individuals and corporate bodies in line with laid down statutes or laws. Hence, it is geared equally to regularise the tax affairs of persons who have defaulted in meeting their tax obligations and will most definitely promote voluntary self-regulatory compliance culture. In addition, the taxing authority must introduce ethics programmes and sell it to the taxpaying public as part of its taxpayer centric programmes to impart an integral system of values on morality, integrity, ethics, and justice, and to raise awareness on the payment of taxes for all natural persons in the sphere of doing business in The Gambia. More investments are needed to bring the taxing authority in line with best international practices quality and courteous services to its valued clientele and stakeholders and where automation directs the business processes of taxation, instead of the decade-long practice of direct interactions between the payer and the administrator. The IVATA 2012 need to be devoid with obsolete provisions that are not in line with our current economic realities and our development needs. Additionally, training and capacity development must be an ongoing process to enhance the knowledge and capacities of the revenue officers to better execute the functions of their entrusted roles. These if properly pursued will create a beneficial winning strategy for all and sundry. God bless The Gambia and give us the powers of conscience and reasoning to act in the best interest of our beloved country (Mother- Gambia). Aluta Continua (the struggle continues) for citizenship actions in the course for justice.!

 

 

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