Wednesday, December 23, 2009

2010 Sketch Out Returns Pegged at D5.474 Billion

The 2010 budget for total revenue is D5.474 million, according to the Minister of Finance and Economic Affairs Hon. Abdou Kolley reading the budget at the National Assembly of Friday 18 December 2009. The 2010 budget which is based on a sound Macroeconomic Policy Framework to support growth, maintain Low Inflation and Improve Debt Sustainability.
The budget speech that lasted for one hour fifteen minutes was presented before National Assembly Members, Ministers, Deputy Ministers, Civil Society Organisations, UN Agencies, Diplomats, Press, individuals among others.
According to Minister Kolley, the 2010 Budget represents a decisive step by Government to tackle The Gambia’s heavy debt burden, in particular interest payments on domestic debt. This budget, he added, aims to reduce debt and create savings that could become an important resource for other non-interest expenditures.
Central Bank of The Gambia, Kolley stated is working closely with the Government in which he believes can a sound budget implementation adding that the Treasury bill yields can be significantly reduced in the months ahead.
”Total revenue and grant is expected to increase from its budget of D4.582 billion in 2009 to 5.474 billion in 2010. This is driven mainly by increases in tax revenues, projects grants and budget support. Tax revenue is projected to increase from its figure of D3.39 billion in 2009 to D3.991 billion in 2010, representing 18.5 per cent of GDP. The overall increase in grants from a budget of D811 million in 2009 to 1.061 billion in 2010 is mainly due to expected increases in project disbursements from D513 million to D636 million and additional HIPC and EU budget support of D425 million.”
He continued the Expenditure and Net Lending is projected to increase from D5.363 billion in 2009 to D5.772 billion in 2010. An interest payment on debt is projected to decline from a budget of D845 million in 2009 to D762 million in 2010. Other current expenditures, including externally financed, are projected to rise from D4.461 billion in 2009 to D4.948 billion in 2010, of which Personnel Emoluments is expected to increase from D1.035 billion in 2009 to D1.499 billion in 2010.
He noted that the Budget deficit for 2010 is projected at D298.7 million representing 1.39 percent of Gross Domestic Product (GDP). This deficit will be fully financed through domestic and external resources. The net-external financing is estimated at D354.7 million while net domestic financing, which includes repayment of arrears and domestic loans is in the sum of D120 million. Proceeds from capital revenue is equivalent to D64 million.
On some highlights of the revenue and policy measures for 2010, Minister Kolley said that the Economic growth and development of any nation depends to a large extent on a vibrant private sector saying that time has come for that private sector to be more proactive, more enterprising and forward-looking and willing to invest with a long term perspective.
“I would also call on private sector operators to consider joining forces to create medium to large businesses that can benefit from economies of scale and complete better in an ever-increasing competitive environment.” He stated.
In the past, he said the Government has offered several incentives to the business community but these benefits have, in many instances, not translated into increased production and productivity, employment generation or meaningful reduction in prices.
This “one-sided partnership” has to change if the ideals of a private sector led growth are to be realized. It is worth noting that fiscal incentives are not meant to be permanent, but to facilitate the growth and development of a business and addressing specific development concerns.
The Government, he promise will continue to create an environment conducive to private sector growth, but is will not be up to private sector operators to seize the opportunity so that together we move this country forward. The reduction in interconnection charges in the telecommunications sector in the past two years, and the recent reduction in electricity tariffs are all measures aimed at improving the competitiveness of The Gambian business environment.
While the government reaffirms its commitment to a comprehensive tax reform in the coming years, the corporate tax will be gradually reduced, starting with a two percent reduction from 35 per cent to 33 per cent for 2010. Similarly, the turnover tax will be reduced by 0.5 per cent.
“As an incentive for voluntary compliance with our business and tax laws and regulations, including keeping of proper books of accounts, subsequent reduction in corporate tax will only be applicable to businesses that have satisfactorily submitted audited accounts for the preceding year to the GRA. Meanwhile, the implementation of the tax on interest income has been different.
“In as much as voluntary compliance is highly desirable and encouraged, no effort will be spared to strict enforcement of, and compliance with, the country’s tax laws. Indeed, the creation of a competitive business environment also calls for greater transparency and accountability on the part of operators.”
Furthermore, following the completion of a nationwide Rental Property Survey, Gambia Revenue Authority (GRA) will embark on a more rigorous collection of taxes on rented properties within the taxable threshold.

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