By Omar Bah
The Gambia has been relying heavily on donor support to finance critical government activities. Approximately 27 percent of the budget was funded by donors on average between 2018 and 2023. The support seems to have reached its peak despite the country’s growing developmental needs. In response, the government, through the 2024 Budget and the 2025-2028 Medium Term Fiscal Framework, has committed to increasing domestic revenue. Their goal is to gradually increase the revenue-to-GDP ratio from 12 percent in 2022 to 15 percent by 2028. Increasing domestic revenue mobilisation is expected to ensure sustainable government funding, reduce overdependency on donor aid, and improve public governance.
The Gambia Revenue Authority (GRA) continues to stand as a pillar of economic stability and growth in the small West African country.
Under the stewardship of Commissioner General Yankuba Darboe, the GRA has embarked upon an ambitious transformative journey to enhance the nation’s revenue collection capabilities and to ensure and promote fiscal responsibility.
CG Darboe, a seasoned civil servant known for his integrity and vision, took the helm during a challenging economic phase of the country’s history. At the time, the government was confronted with mounting demand for the delivery of efficient and effective public services while it grappled with a choking budget deficit. Recognising the urgent need to bolster the country’s financial resource base, CG Darboe spearheaded the implementation of a raft of reforms tailored to improve voluntary tax compliance as well as expand the tax base.
One of his first initiatives was to modernise the GRA’s operations. He streamlined cutting-edge technology into revenue mobilisation processes, facilitating the online filing of tax returns by businesses and individuals. He also introduced an annual compliance tax award recognising the most compliant businesses. These moves have not only increased efficiency but also reduced the opportunities for corruption, fostering a culture of transparency within the agency.
Under Mr Darboe’s leadership, the GRA launched an extensive public awareness campaign to educate citizens about the importance of taxation.
“I believe that for the GRA to succeed, the public needed to understand how their contributions would be used to improve healthcare, education, and infrastructure,” he said.
Media campaigns, town hall meetings, and community outreach programs became common, allowing citizens to voice their concerns and suggestions.
“As a result of these efforts, tax compliance rates began to rise. Small and medium enterprises that had previously avoided taxation started registering, encouraged by the GRA’s new friendly approach. We also established a dedicated team to assist businesses with their tax obligations, ensuring that they received the support they needed to thrive,” CG Darboe added.
In addition to enhancing tax collection, Mr. Darboe sought to diversify revenue sources. He spearheaded initiatives to promote areas that held great potential for economic growth.
Under CG Darboe, the GRA has significantly increased its revenue collections, rising from millions to billions of dalasi. This transformation is attributed to several strategic reforms and technological advancements.
For instance, the introduction of the Automated System for Customs Data (ASYCUDA) has streamlined customs operations, enhancing efficiency and transparency. This system allows importers to electronically declare goods and calculate duties, which has improved compliance and reduced evasion.
The GRA has also adopted various technologies, including the E-Tax and digital tracking systems. These innovations have facilitated better monitoring of goods and improved revenue collection processes at ports and border posts.
In the first quarter of 2024 alone, the GRA collected D5.2 billion, aiming for an annual target of D19.2 billion. This collection included record monthly revenues, demonstrating the effectiveness of the implemented reforms.
Despite all these figures, CG Darboe added, the GRA is not increasing tax rates but is instead broadening the tax base by bringing more entities into compliance, which has led to increased overall collections without raising existing rates.
According to economist Momodou Touray, Mr. Darboe’s leadership did not go unnoticed.
“The GRA’s performance has improved significantly, and the government began to see a steady increase in revenue. This newfound financial stability allowed for increased investment in public services, improving the lives of Gambians across the country,” Touray told The Standard.
As the years passed, the GRA transformed into a model of efficiency and effectiveness, earning respect both locally and internationally.
Through his unwavering commitment, Mr. Darboe not only raised revenue but also instilled a sense of pride and responsibility among citizens, paving the way for a brighter future.
“The story of the GRA under Yankuba Darboe became a testament to the power of leadership and community engagement in driving national development,” Lamin Njie, a businessman, said.
Like other developing countries, The Gambia faces significant challenges in raising revenue, which include widespread poverty, hard-to-tax groups, disorganised accounting in the private sector, outdated laws, and weak administrative capacity. To navigate these deficiencies, the GRA has embarked on several reforms over the past decade, which include the introduction of Value Added Tax (VAT), modernisation of Customs and Excise Regulations, and implementation of the ASYCUDA++ system of customs administration.
The authority has also recently shown renewed interest, however, in closing revenue gaps. With technical support from the IMF (and financial support from the European Union) and the World Bank, a dedicated Directorate of Revenue and Tax was established in 2023 under the ministry of finane. This directorate is tasked with designing, formulating, reviewing, and monitoring tax policy as well as participating in trade protocol negotiations. The directorate has made significant progress, including a comprehensive assessment of the legal framework for both tax policy and revenue administration, a careful examination of tax expenditures and recommended changes, and a thorough review of avenues to enhance domestic revenue mobilisation. Findings from these assessments have revealed substantial opportunities for transformative reforms. The GRA has also made progress in enforcing income tax compliance and raising awareness of the obligation to pay corporate income taxes by major contractors, especially as it relates to their income from government public works projects and concession contracts. According to statistics, consequently, receipts of withholding tax more than doubled in 2024. The government has also recently approved a licensing system to regulate and collect tax from apartment residences offering short-term stays to tourists. The implementation of this reform has resulted in income tax from property rentals growing by over 70 percent in the first half of 2024.
The GRA and its key stakeholders have also rolled out an excise tax stamp solution for excisable goods. The system aims to curb tax evasion, underreporting, smuggling, and other illicit practices to ensure fair competition and boost revenue collection.
The Investment Incentives Under the Gambia Investment and Export Promotion Agency (GIEPA) Act of 2015 has also been reviewed and revised. Its aim is to rationalise the incentives to make them more focused and relevant whilst also striking a balance between attracting foreign investment, promoting domestic investment, and preserving the tax base.
Duty waiver policy
Once approved, this policy will require eligible businesses or individuals seeking duty waivers for specific imports to demonstrate a satisfactory record of tax compliance. This will encourage voluntary tax compliance and reduce tax evasion, ensuring a fair and equitable tax system for all taxpayers.
The partial implementation and the signalling effect of these reforms have contributed to an increase in domestic revenue from 12 percent to 13 percent of GDP in 2023. In the first half of 2024, tax revenue exceeded its target by 7 percent, and revenue is 29 percent above the same period in 2023. It is expected that if the reform agenda is sustained to year-end, an additional 1 percent of GDP may be added.
