By Omar Bah
The Commissioner General of the Gambia Revenue Authority, Yankuba Darboe has confirmed to journalists yesterday that Haddim Gai of Gai Construction has paid all his taxes for the Banjul Roads Rehabilitation Project.
According to a National Audit Office report, the contractor is exempted from paying taxes as per the addendum to the contract.
Th auditors have said when legal opinion was sought from the Ministry of Justice, they advised the Ministry of Works to seek guidance from the Ministry of Finance and the GRA on the feasibility of these tax exemptions.
In their response, the GRA letter referenced KB 165/182/01 (28) dated 20 October 2020 stated that an avenue for granting income tax exemption is through the approval of a Special Investment Certificate (SIC) under the Gambia Investment and Export Promotion.
Furthermore, GRA in the same letter quoted above stated that considering the fact that the tax exemption article in the contract is at variance with both the IVAT Act (2020) and the GIEPA Act, they cannot allow such exemptions in the computation of the tax liabilities of the contractor.
The auditors said the contractor is required to pay withholding tax amounting to D114,185,501.95 as per the payments made on the IPCs.
However, reacting to the auditors’ queries on the non-payment of taxes, the ministry of works said: “The contract was priced without tax and duties and signed as such. Payments are equally processed without withholding tax deductions. The project is duty & tax free. The Ministry of Finance reviewed and signed off the financial addendum of the contract. MoJ then advised that the contract without withholding tax be referred back to MoFEA for further guidance.”
But speaking to journalists yesterday at the government’s press conference on the project, the Minister of Works Ebrima Sillah said there was another addendum on the contract that removed the tax exemption.
Confirming this to journalists, the GRA boss said: “Mr Gai regularly honours his tax obligations and submits his company’s audited accounts on time. As far as we are concerned the man is always filling his taxes and based on what he is filing is where we tax him and there are facts to prove that. Anybody being a project or not, if you have an economic activity in this country and you are getting money you will pay taxes and Gai Construction is also paying taxes.”
Speaking further on the matter, Minister Sillah said the government does provide a certain tax exemption on projects funded by the state or donor organisations. “For example, if we consider that bringing in gravel or basalt over from the neighbouring countries into the Gambia is going to cost us more to do the construction work – my ministry and the ministry of finance provide tax exemptions. There are also duty waivers that we also give that are related to the construction works so that we reduce the cost burden of the construction on the government,” Minister Sillah said. He said though duties are waived but a number of taxes are paid. “In fact, since 2019 for this Banjul Project there are proofs here from the Gambia Revenue Authority that Gai Construction has been paying taxes. These are the clear tax clearance certificates given to the contractor by the GRA. So, the taxes were paid and tax clearances were given. Yes, we did waive duty taxes for Mr Gai but he is not the only contractor who benefitted from that,” Sillah said.