Hon. Seedy Keita, the Minister of Finance and Economic Affairs
By Ramatoulie Jawo
During a session at the National Assembly, Hon. Seedy Keita, Minister of Finance and Economic Affairs, provided detailed clarification regarding the arrival of 36,935.614 metric tons of petroleum products in Gambian waters. The minister disclosed that the total value of these products amounted to $30,000,000 post-sales.
Hon. Keita addressed queries from National Assembly members, particularly from Niamina Dankunku, shedding light on the importation process by CREED ENERGY and APOGEE. These entities managed transactions across multiple currency accounts, including Dalasi, Euro, and Dollar accounts within Eco Bank and Access Bank.
“Hon speaker, as of June 10th to August 29th, 2023, a total of D654, 452, 915.45 was lodged or deposited in Creed Energy and Apogee EcoBank Dalasi account number 6240038326, while the Dollar account has a deposit of $532,500. In the same vein, a total deposit of D544, 692, 431.55 was lodged at the Access Bank account number 001010000555. Hon. Speaker, could the Hon.Minister for Finance and Economic Affairs inform this August assembly how much tax the Gambia Revenue Authority collected from this Cargo?” he asked.
Minister Keita informed the assembly in response to the question that the GRA had received an intelligence report dated October 11, 2023, from the Financial Intelligence Unit (FIU) concerning the activities of four companies: CREED Energy Limited, Ultimate Beat Logistics Gambia Limited, Ultimate Beat Logistics Ghana Limited, and Apogee FZC.
According to the report, CREED Energy and Ultimate Beat Logistics Gambia Limited were incorporated in the Gambia on May 7, 2021, and May 25, 2023, respectively. These companies were established to engage in the export and trading of petroleum products. Apogee FZC, on the other hand, was incorporated in the UAE and is involved in national trade activities, including the sale of petroleum products.
“On the 28th of February 2023, Apogee FZC, entered into a contract with Ultimate Beach Ghana Limited, to supply gas oil at CIF Cost Insurance and Fraud, and the place of delivery was for Tema Ghana. Subsequently, an addendum was made to the contract to change the place of delivery to the Gambia, and a bill of lading was issued to Ultimate Beach Ghana Limited as the consignee. Meanwhile, GREED Energy and Ultimate Beach Gambia Limited, partnered to sell the product in the Gambia, and CREED Energy instructed Access Bank to issue two letters of comfort to Apogee FZC indicating the company is financially capable of paying the purchase price,” he highlighted.
He mentioned that later, it became clear that neither of the two companies had the financial capability to make the initial deposit.
“CREED Energy and Ultimate Beat Logistics Ghana Limited, Gambia Access, and EcoBank, reached an agreement to create a subaccount at Eco and Access Bank, which gives Apogee FZC the sole right to withdraw from the subaccounts. The sub accounts in Gambian dalasis, Euro, and US Dollars were meant to see the proceeds of the petroleum products as trust accounts for the supplier owing to the risk,” he said.
Minister Keita stated that the gas oil was delivered to the GAM Petroleum Depot and subsequently sold to oil marketing companies in the Gambia. He mentioned that the resulting funds were deposited into a designated subaccount for imports, subject to applicable duties and taxes.
“ However, there is a special regime for taxing oil marketing businesses. The deposit is treated like a bonded warehouse. Any product that enters the depot is not subject to duty as long as it is not consumed in the Gambia; however, once the product is designated for consumption in the Gambia, all taxes applicable to it are paid at the point of exit from the depot,” he said.
He mentioned that when an OMC takes a product from the depot, all taxes—including import VAT on oil, import duty on oil, import excise on oil, fuel levy on oil, PURA fees, cargo park fees, motor vehicle, and road tax—are calculated based on that product before it leaves the depot.
“Given the special regime of the petroleum industry, all taxes are calculated based on the uplift of the OMC and are payable between the 25th and 31st of the month. Therefore, this particular product has paid all taxes and duties applicable to it. The supply company Apogee was incorporated in Dubai, UAE and had no business activity in the Gambia before this transaction, therefore, it is not within our tax jurisdiction,” he said.
He explained that the income derived from supplying goods internationally is not subject to taxation in the Gambia, as these products do not constitute taxable income in the country. Additionally, he clarified that Oil Marketing Companies (OMCs) incorporated in the Gambia are required to pay corporate income tax on their earnings for the fiscal year.
“The trade margin, which is the income of the OMCs in an oil transaction, is calculated as part of the income of the entity at the end of the financial year. For CREED Energy and Ultimate Beat Gambia Limited, as companies incorporated in the Gambia, are both liable to pay taxes separately, in particular corporate income tax on their income,” he added.
He said that there are identifiable funds in the subaccounts observed by the National Assembly member. While these funds are held in the subaccounts, they should not be considered part of their income.
“It is our opinion that, going by the facts and evidence received, the funds should be treated as funds held in trust to be repatriated to the supplier as a mechanism to mitigate the risk to the supplier given the circumstances. After receiving the report from the Financial Intelligence Unit, the two companies were engaged by the GRA on their business activities and together with obligations to file annual tax returns and pay assessments of taxes,” he highlighted.
He mentioned that both of them have been encouraged to submit their tax returns. They have also requested the GRA management for additional time to organize their finances and settle their assessed taxes for the year, considering it a reasonable appeal.