Before the creation of the Gambia Revenue Authority (GRA) as a semi-autonomous body in 2004, all revenues from taxes, duties, vehicle license fees, road tax and other fees such as number plate, driving license and passport used to be collected by the relevant Government departments and deposited directly into the Consolidated Fund Account held at the Central Bank, the sole and principal depository bank for all Government revenues in accordance  with the Constitution as well as the Central Bank Act 2005.

In a cash-strapped tax driven economy, the timeliness of revenue recognition is crucial in meeting revenue targets to facilitate real-time cash planning, effective budget execution and accurate accountability of public funds in line with international best accounting practice. By using alternative private arrangements for the collection of taxes, vehicle licenses and other fees, which is not only an assault on our Constitution, but the complexity of  having such sophisticated mechanisms baffled taxpayers, motorists and the general public at large especially under a system fraught with inconsistencies, financial impropriety and rampant greed and corruption perpetrated by a reckless, greedy ex-head of state who was doing everything to pillage the meagre resources of this country.

Diverting Government revenues to the fuel companies is a form of State-sponsored corruption

The elaborate mechanism of diverting government revenues to the oil companies is a unique type of state-sponsored corruption designed to feed the appetite of one of the major players heading the oil cartel in this country.  There is no doubt that the ex-president held the majority investments in the oil industry of this country. Through a very complex arrangements, funds from public enterprises were used to provide the initial investment outlays for the oil storage facility located at Mandinary Village primarily supplying fuel to the oil retail outlets scattered across the country.

Controlling the supply and distribution of fuel in this country, made Jammeh one of the richest head of state in Africa whose combined wealth is greater than the average GDP of the country. How GRA can justify such exploitative taxation to benefit one individual especially when most private motorists in public institutions habitually use fuel-coupons to fuel their private cars, questioned the entire arrangements and violate the concept of prudence in accounting theory. Recouping all the fees relating to vehicle license, road tax and parking fees from the fuel pumps and paying them to the CRF account at the Central Bank, is a system that reeks of unfairness. It has corruption written all over it.

Whatever the motive, accounting for the license and parking fees under this arrangement will not be straightforward. The accuracy of receiving, recording, and banking payments of Government revenues including the timely preparation of bank reconciliation statements, is essential for proper accountability of public funds. It is a good move that the new government of Mr. Adama Barrow just announced a reduction in fuel price, this trend should continue as oil analysts are predicting a further reduction of world prices for fuel during the course of the year. Therefore, because of the volatility of oil prices it is imprudent to tie government revenues to the eruptive prices of fuel. It is like mixing apples with oranges; a move that is frown upon by bean-counters.

Re-distributing taxpayers’ money to the commercial banks is unconstitutional

A similar arrangement was made six years ago when the first of several MOUs with the commercial banks was signed between GRA and Guaranty Trust Bank to receive payment of taxes on behalf of the Authority. After three years of ‘piloting’ the scheme with the GTBank, the partnership was extended to three other commercial banks as a charade. The initiative was only meant for one bank and one bank only, GTBank.  It has to be mentioned though that Section 161 (3) of the Constitution established the Central Bank as “the sole banker of the Government and the principal depository bank for all funds raised for, or on behalf of, the Government.”

Therefore, engaging the services of some commercial banks to receive payments of taxes on behalf of the Authority when there are competent cashiers in all of its tax and branch offices across the country is not only a gross violation of the 1997 Constitution, but without a Bill passed by the National Assembly to legislate for it, render those signed MOUs to be unconstitutional. Even if they are meant to hedge against the growing risks associated with the commercial banks’ exposure to rising government domestic debt.

Whatever conditions or criteria set for the banks in their agreements, it is questionable whether the banks are not using taxpayers’ fund for commercial purposes.  Banks operate by taking deposits and lending them out to make profits. It remains to be seen whether there are adequate provisions in the said agreements to safeguard against misuse of taxpayers funds for purposes other than to remit those funds to the CBG on a daily basis. Was this arrangement a directive from ‘above’ as was the norm in the previous regime or was it part of another elaborate scheme of state-sponsored corruption?

Strong policies needed in the management of public funds

Whatever the motive, the partner banks have benefited enormously at the expense of the taxpayers this can be seen form the extraordinarily huge of profits that these local banks report every year regardless whether the economy is doing well or not. Where do all those profits come from? The answer is not difficult to fathom. With GRA generating revenues of up to D7.9 billion last year, banks would do anything to hold on to this gratuitous financial bonanza.  

Since this arrangement was started in 2011, there have been significant increases in government domestic borrowing with the commercial banks at the exclusion of private borrowers. Is the commercial banks using taxpayer’s money to lend back to Government through active participation in the buying of Treasury bill with short-term maturities? There is only one way to maximize Government revenues which is to bank all tax collections, custom duties, vehicle license and parking fees directly into Government’s Consolidated Revenue Fund at the Central Bank. This will enhance timely revenue recognition, facilitate monthly reconciliations exercise and enable accurate reporting as well as reducing the dangerous levels of the Government domestic debts owed to the commercial banks.

This new administration must come up with strong policies and guidelines in the management of public funds to achieve fiscal discipline at the national level that will lay the foundation for transparency and accountability in the use of taxpayer’s funds and other public resources. GRA will do us a great service if they start recovering the unpaid taxes from all the businesses owned by the ex-President.  Gambian taxpayers have the right to know.

MBO Gaye

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