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toubab1020
12314 Posts |
 Posted - 25 Feb 2010 : 12:53:22
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I found this tax breakdown and "Explaination" within the pages of The Observer,I wish the author and his wife a speedy recovery.
http://observer.gm/africa/gambia/article/taxation-and-tax-returns
How exactly is Mr North Bank farmer going to understand this ? and does he know that he has to pay tax ? Does he have to pay tax anyway ? Are there any allowences offered on taxable income? Maybe there is a Bantaba in Cyberspace reader who works for Price Waterhouse or some other accounting company who can explain in simple terms (of course  )exactly what the Author is talking about and what is the percentage of the tax take on income? I bet I get no replies to this posting 
Taxation and tax returns
Africa » Gambia
Thursday, February 25, 2010
We could not publish this last week due to The Gambia's 45th Independence Anniversary celebration and here we are once again in our crusade in bringing easy and digestible tax information to enlightened the taxpayers and those wishing to invest in the country.
The intimate nexus between Taxation and tax returns in revenue administration is inextricably link as a foresight relationship depicting the true nature and bonded relationship taxation share with tax returns. This is because taxation cannot take place in the absence of tax returns, provided there is the means for the taxpayer to provide his/her tax transactions over the year or on a quarterly and monthly basis to the Commissioner General.
The 'best of judgement'principle is only applicable in the event that the taxpayer fails to provide the needed and available tax information of his/her tax transactions to the tax office, which is used as a pre-assessment tool to compute his/her taxable income. In The Gambia, the administration and usage of tax returns has taken a different shape due to the creation of the Gambia Revenue Authority and the inception of the Self Assessment Tax Regime. This system of taxation allows the submission of tax returns either on quarterly, monthly or on an annual basis. In addition, special tax years are also provided for companies in catering for their special needs due to the time of registering their companies for taxation matters upon the approval of the Commissioner General.
Remember, this is premised on the generally accepted accounting principles. Although, January to December each year are been identified as the Tax Year and for which 31st March has been set aside as due dates for submission of tax returns. Consequently, the submission of tax returns is done either on a quarterly basis for corporate institutions/bodies on corporate taxes and monthly payments of taxes for PAYE, Sales Tax and other Withholding taxes. Therefore, this system is introduced to facilitate business tax transactions and to enhance the timely provision of reliable tax information, hence ease the collection of taxes and improves the effectiveness of tax payments.
In today#146;s discourse, I intend to share with you on the nitty-gritty and importance of tax returns, types of tax returns, offences and penalties embedded within the clusters of the Income & Sales Tax Act, 2004 and the Income & Sales Tax (Amendment) Act, 2007, respectively. Happy Independence Anniversary to all and friends of The Gambia, as our Country #150;The Gambia marked 45th years of Nationhood, signifying our true Independence from British Rule. May we continue to sail on the development-driven path of continued economic growth and sustenance for a more civilised and progressive country.
A tax return is a form that is purposely designed to enable businesses and taxpayers to furnish official tax statements of their accrued source of income (s) within a tax year basis. Therefore, it is obligatory under the Income and Sales Tax Act, for an Income Taxpayer to furnish an income tax return for each tax year.
Requirements of tax returns
Tax returns are statutory requirements in The Gambia#146;s trading environment specifically for taxation purposes. They are devised for the taxpayers as an information tool-kit in providing requested and needed tax information of taxpayers tax transactions during the course of a year, quarterly or monthly for the ease of ascertaining their sourced of income against expenses in the computation of taxes. It is a pre-assessment mechanism in providing the tax office with first-hand information on taxpayers.
Reasons for filing and submitting tax returns
It is a fundamental requirement for taxpayers (Individual, Company and Partnership Establishments) to furnish income tax returns to the Tax Office on the specified due dates for ease of proper referencing on their tax transactions, declarations and the expenses claimed as allowable. Thus enabling the Tax Office to compute and assess the right tax (es) to be paid by the declaring taxpayer/business entity.
The reason (s) for filing and submitting of tax returns is/are for the ease of the followings:
a. Ascertaining the correct tax to be paid;
b. Enabling the taxpayer (s) to make justifiable claims for personal reliefs;
c. Instils a sense of civic responsibility towards tax payment requirements;
d. Invigorates a sense of voluntary compliance and disclosures on transacted and earned business incomes and the expenses incurred;
e. Assist taxpayers/ businesses to claiming capital allowances and other allowable expenses within the limits of the Gambia#146;s tax laws.
Types of tax returns
Tax returns as explained and contained under the Income and Sales Tax Act 2004 and the Income and Sales Tax (Amendment) Act 2007, as the principal Acts is been used here and digested specially in communicating to you on the #145;onus#146; of tax returns and types in The Gambia.
Therefore, the basis of tax returns are premised on the types of taxes administered in The Gambia under the Domestic Taxes Department (DTD) and these are:
1. Individual Income Tax Returns distinctively refers to Personal Income Tax (PIT). It is distinguished into three-tiers, which deals with Individuals, Partnership and Company. Thus, the Individual Income Tax Return specifically deals with issues relating to Business Income, Employment Income and Property Income information. Business Income is any profit or gain accrued in an invested business activity. On employment Income, employers are required by the tax laws to furnish income tax returns of monthly-deducted PAYE taxes, 15 days after the end of the month.
In a separate development, employers are also required to provide to the Tax Office of any cessation of employment of its member of staff or in the event of any new entrant staff into its establishment for ease of documentation and referencing in the payment of necessary income taxes. Most importantly, if the due date falls on a weekend the beginning of the following week becomes the due date for the submission of the tax returns on PAYE, Sales Tax and other Withholding taxes.
Property income is any dividend, interest, royalty, rent, natural resources amount or other amount arising from the provision, use, or exploitation of property; or any pension charge, or annuity, or any supplement to a pension, charge or annuity but does not include a amount that is business or employment income. In short, it is what is provided on the basis but does not attracts any act of income generating activity for profit or gain expectations.
2. Corporate Income Tax Return: This is devised purposely for corporate institutions/bodies, which requires information regarding the profit and loss account statement of the corporate institution, the balance sheet, capital allowances, details of exempt income, income taxable at different rates and other payments, distribution of partnership income respectively.
3. Withholding Tax Return (read the previous Articles for a detailed understanding and digestion on the issue).
4. Capital Gains Tax Return: A Capital gains taxpayer shall furnish a capital Gains tax return
within fifteen days after the disposal of a capital asset. Failure of not furnishing a required capital gains tax return in respect of the disposal of a capital asset by the due date requires the Commissioner- General by the tax laws to determine the consideration received and capital gain on disposal, and make an assessment of the capital gains tax due on the capital gain. This is based on the available information given/provided to him and to the best of his judgement in exercising his powers under the Income and Sales Tax Act, regarding the legality of capital gains tax procedures (furnishing of capital gains tax returns).
5. Rental Income Tax Return is a declaration form designed that entreats resident taxpayers to furnish residential rent tax information on the rent (s) received for each tax year. Remember the computations of commercial rents are ascertained on the basis accrued gross income received.
6. Fringe Benefit Tax. Fringe benefit refers to the following benefits provided by an employer to his/her employee in the form of either #150; motor vehicle, housing, loan, property, entertainment or medical benefits, etc. Thus, it is a requirement of the employer to furnish Fringe Benefit Tax Return to the Tax Office for each tax year within a grace of three (3) after the end of the year. (Catch us in our subsequent articles for detail digestion on Fringe Benefit Tax computation and procedures)
7. Sales Tax Returns is the return to be furnished to the Tax Office for each sales tax period within fifteen days after the end of each period.
Offences and penalties
The following are classified as offences in the filing and submission of tax returns, as provided in the subsequent articles and sub-sections of the Income & Sales Tax Act 2004 and the Income & Sales Tax (Amendment) Act 2007; respectively:
a. Failure to furnish a tax return is both an offence and a penalty is attached to such act of negligence in one#146;s tax obligation/or status.
b. Making false or misleading statements is also tantamount to a serious revenue offence and for which the institution of penalties are charged as a means of punishing and deterring any further recurrence of such actions by a taxpayer/ business entity doing business in the country. Remember the imposition of penalties are not to serve as disincentive to investments but to serve as control mechanism in instituting a positive culture of optimal voluntary compliance to the taxpayers.
In this regard, necessary amendments were made in 2007 as a means of giving the imposition of penalties a more rational approach towards any committed tax offences of The Gambia#146;s revenue laws. To this, the Income and Sales Tax (Amendment) Act 2007 create a penalty for failure to furnish tax return within the due date. The penalty imposed under the said amendment attracts a fine of Five Thousand Dalasi, instead of the previous imposition of penalties on the #145;pro rata#146; basis of percentage, from 5% - 25% maximally. In this regard, the said amendment Act substitutes the previous imposition of penalty from Percentage to exact amount.
It is a good reform agenda and a facelift to tax administration and collection, injecting in the minds and hearts of the taxpaying public confidence and rationality. The rationale for such reform agenda is conceivably geared towards making Gambia#146;s tax system investment driven and revenue generating based on the mutuality of interest on a common ground and objective between the Tax Authority and the Taxpaying public. Most importantly, it is to encourage a form of participatory approach and participation in revenue generation and administration.
'The Author is the Senior Compliance & Strategy Officer of the Gambia Revenue Authority'. According to reliable sources, the writer was involved in a fatal car accident with his wife on Sunday, 20th February 2010. We learnt that they sustained serious injuries and on behalf of our valued readers on the 'Business & Finance Column', we wish them a speedy recovery and Allah#146;s mercy, support love and guidance in their sick beds. Amen!
Author: by Assan Jallow
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"Simple is good" & I strongly dislike politics. You cannot defend the indefensible.
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