By Yusef Taylor, @FlexDan_YT
According to the Gambia Revenue Authority’s (GRA) Board Chairperson, Mrs Lucy Fye “on average, last year, 2019 GRA was collecting almost a Billion [Dalasis] a month. Now this year because of the Covid this has been slightly affected but last month we did collect a Billion a month”. Speaking at the opening of a Tax Seminar with the media fraternity on 24th November 2020 she told journalists that the Gambia’s tax targets “are set together with GRA staff, Ministry of Finance (MoFEA) and the International Monetary Fund (IMF). So, it’s at that level.”
During the seminar, organised by the Gambia’s tax-collecting agency, GRA, she hinted to her colleagues and journalists on the importance of controlling tax when setting the country’s annual tax collection targets with the IMF and MoFEA, she stressed that “it’s very important that GRA also argue and say no don’t push those numbers up. We cannot reach there so let’s be realistic. We have the director of technical services. I hope you will really ask him these important questions on how these targets are set, which taxes and so forth. He knows it inside out.”
GRA collected D9.8 Billion Dalasis, End of October 2020
Later on, during the seminar, the Director of Technical Services revealed that “as at end of October GRA collected D9,834,031,253 Dalasis.” According to the 2021 Draft Budget, the 2020 Approved Tax Revenue projections come to D11,601,157,000. This means that from January to October 2020 GRA has collected over 84.77% of its projected 2020 Tax Revenue collection target.
According to the 2021 Draft Budget, the total estimated Nominal Gross Domestic Product is almost D107 Billion Dalasis and the estimated revenue to be collected in 2021 is D12.2 Billion, this is almost one Billion Dalasis more than the revenue collection target in 2020.
Speaking on the decline of the Gambia’s Revenue to GDP ratio Board Chairperson, Lucy Fye explained that “right now the Revenue over GDP Ratio is 13%. It could have been higher than that. It used to be like 16% but because of rebasing of the GDP calculations it’s now 13%.”
According to her LinkedIn profile, Lucy Fye has “over 25 years of extensive experience working as a trained economist”. She worked for the Gambia Government and for the “World Bank Group for over 15 years and in over 15 projects”.
Gross Domestic Product Economic Lessons
Explaining some of the fundamental concepts of the Gambia’s Gross Domestic Product (GDP) that journalists can use to better analyse the Economy, Mrs Lucy Fye explained three Economic Equations which journalists should take note of. “We really need to grasp and [understand] the role of GRA on the Economy. It’s the main source of internal income for Government. We have a very important production function called the GDP”.
“These three equations are part of the equation of GDP of production in the Economy informs the various activities in the economy and each one of them you get a deficit.”
The three equations for Gross Domestic Product which she referred to as Y include and additional six variables namely; Savings (S), Investments (I), Taxes (T), Government Expenditure (G), Export (X) and Import (M).
The three equations for GDP (Y) she highlighted are thus;
Equation 1 – GDP (Y) = Savings (S) – Investments (I)
“S-I. Because to invest you need to have savings and if you don’t save you cannot invest. So that’s also now the Central Bank and of course Ministry of Finance they all strive now to make sure that we save, we have enough money to save and we invest money where we can generate money back to savings. So that’s one equation.”
Equation 2 – GDP (Y) = Taxes (T) – Government Expenditure (G)
“Then you have T-G now that’s where you have the fiscal deficit. So, taxes are very important. That is where the gap is. Right now, Parliament is talking about the Budget So their budget is based purely on the Taxes that GRA collect. And if there is a gap now that where they talk about borrowing from where the financial sector the banks which comes from S-I. So that’s where we talk about crowding out the private sector. So, if Government now takes all the money then what will private sector use.”
Equation 3 – GDP (Y) = Import (X) – Export (M)
“And obviously X-M the trade deficit. How much you import minus how much you export. So that’s how important GRA is to the Economy in collecting the funds for the budget. Right now they are talking about the budget this is how much should go here and how much should go there but who collects it? It’s GRA”
“At GRA we have this very important slogan GRA is your GRA and GRA is our GRA. We all contribute to GRA activities and GRA works for us so we really have to support GRA.”