By Landing Ceesay
The Commissioner General of the Gambia Revenue Authority (GRA), Mr. Yankuba Darboe has said that taxation can only be legitimate if the revenues derived from it are utilized for the public good.
“Citizens have always asked the question: Why should one pay tax to the state, and what is in it for them? There is always an expectation from the citizens that the taxes they pay come back to them in the form of goods and services. Therefore, taxation can only be legitimate if the revenues derived from it are utilized for the public good. In giving his or her consent to be taxed, the main concern of the taxpayer is what they get directly in return from their tax payments, in the form of services,” Mr. Darboe said.
The GRA Boss said the fiscal contract is seen to be the foundation of the relationship between the state and its citizens, and it is the duty of every government to provide for the funding of public goods and services in budgetary allocations.
He said what percentage of tax revenues goes into a particular good or service or sector has always been the subject of debate since the establishment of modern states.
“In The Gambia, for example, we have seen a significant increase in budgetary allocations to critical sectors of the economy such as agriculture, healthcare, education, and infrastructural development. A major infrastructure project that comes to mind is the Banjul Rehabilitation Project, which was fully funded with tax revenue. Governments across Africa are becoming more responsive to the needs of their citizens, who are craving economic prosperity,” Commissioner Darboe said.
Commissioner Darboe told the gathering that by 2050, the African youth population will constitute about 20% of the global youth population. Currently, he posited, more than 60% of Africa’s population is under the age of twenty-five, with 70% of sub-Saharan Africa under the age of thirty.
Mr. Darboe, however, stated that this could be a blessing or a curse. He said it could be a blessing if the African continent is able to stimulate the economy to give the youthful population the right economic environment to thrive and prosper, and like China, uplift a considerable number of them out of poverty.
“On the other hand, it could also be a curse if African governments are not responsive to the yearnings for economic prosperity from its citizens across the continent. With more mouths to feed, more bodies to keep healthy, millions of jobseekers waiting in line, the collective frustrations and hopelessness of an unemployed young population can result in severe consequences for the continent. This reality is better imagined than experienced,” he said.
Mr. Darboe said it is also important to ensure that the tax system is simple, transparent, and easy to comply with.
He observed that complex tax codes can create barriers to economic participation and disproportionately impact small businesses and low-income earners.
The GRA Boss made these remarks at the opening ceremony of the West African Union of Tax Institutes (WAUTI) annual international tax conference. The 2023 Conference is the 9th WAUTI annual International Conference since its inception in 2011, and the theme of this year’s conference is “Rethinking Taxation for Human Development and Economic Prosperity.”
Mr. Darboe said at the conference, they will have the opportunity to hear from a variety of experts, drawn from different fields of revenue administration, on how they should re-think their taxation systems in order to better promote human development and improve the lives of all the citizens.
“So, how can we re-think taxation in a way that promotes human development and economic prosperity? One approach is to adopt a progressive tax system, in which higher income earners are taxed at a higher rate. This helps reduce income inequality and ensure that those who are able to pay more contribute a fair share towards the common good. This means considering not just the amount of revenue that is collected, but also how that revenue is used and the overall impact it has in enhancing the welfare of our citizens,” he said.
Mr. Darboe said another approach is to reduce the cost of compliance for taxpayers, stating that Taxpayers already have the burden of paying out a sizable portion of their income to the taxman to comply with their tax.
The GRA Boss asserted that it is the duty of tax administrations to reduce the cost of compliance for taxpayers to the bare minimum, especially for small and medium enterprises.
Mr. Darboe said to achieve this objective, the Gambia Revenue Authority launched its transformation agenda of automating the domestic revenue collection system, processes, and procedure by the end of 2024 to reduce the cost of compliance and bring the taxman to the fingertips of the taxpayer.
“This conference is an opportunity for us to come together and discuss the latest developments in the field of tax administration, share best practices, and network with our distinguished colleagues from across Africa. We have a packed schedule of presentations, panel discussions, and workshops, and I am confident that you will all leave this conference with valuable insights and innovative ideas.