By Arret Jatta
The National Assembly Public Enterprise Committee (PEC) has raised concerns over the non-deduction of withholding tax on payments made to international consultants under major energy sector projects implemented by the National Water and Electricity Company (Nawec).
The matter emerged during a committee session yesterday as lawmakers reviewed audit findings relating to Nawec’s ECOREAP, GERMP and GEAP project reports.
PEC member and NAM for Jokadou Salif Jawo questioned Nawec management over auditor’s observations that payments totalling US$647,900 were made without the deduction of withholding tax, contrary to standard tax requirements.
According to the findings of the auditors presented to the committee, a review of Nawec’s general ledger and sampled payment vouchers revealed that the payments to international consultants were processed without withholding tax deductions.
Responding to the concerns, Nawec Managing Director Gallo Saidy explained that the omission stemmed from contractual arrangements that predated directives from the Ministry of Finance regarding withholding tax requirements.
“The withholding tax issue arose because when these contracts were being signed, there was no provision in the contracts requiring withholding tax deductions. It was only after the contracts had been signed and implemented that the Ministry of Finance indicated that withholding tax should be applied,” MD Saidy told the committee.
He added that Nawec had communicated to the ministry to clarify the situation, arguing that it would not be appropriate to retroactively impose tax deductions on agreements that had already been finalised under different terms.
He however stated that going forward, they will ensure that withholding tax provisions are included in all new contracts.
Another Nawec official appearing before the committee supported the managing director’s explanation, describing the issue as partly arising from a “knowledge gap” during the early stages of the projects.
She noted that the projects were considered costly and that certain tax considerations were not factored into initial contract negotiations.
Members of the PEC emphasised the importance of strict financial compliance, particularly for publicly funded infrastructure initiatives involving international partners.
