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toubab1020
12306 Posts |
 Posted - 14 Sep 2013 : 15:04:34
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Good stuff from the Foroyaa explaining the differences between employment and small businesses,a bit more thought is needed otherwise there will be no small enterpernual business left in Gambia,probably in the shape of lack of local retailers who sell everything from bread to cigarettes. they are open to the risk of tax evasion and its subsequent results,not a good prospect for locals.
Snippet:
"Small businesses and individual salary earners however are different. A small business has a life of its own. There is a minimum of stock that must be available and a minimum of income that must be generated for the business to survive. The small business must be able to replenish itself with new stock. Hence, it must generate profit not only to replenish old stock but also to increase the stock if it is to grow to yield more profit. Secondly, the profit should be able to pay rent, electricity and other utilities and even feed the businessman or businesswoman. The domestic consumption of the businessperson also entails food, clothing, shelter, electricity, water supply, transportation and other social obligations. If domestic consumption exceeds profit the business must collapse."
If domestic consumption exceeds profit the business must collapse."
http://www.foroyaa.gm/editorial/14159-what-is-the-tax-ceiling-for-small-businesses
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"Simple is good" & I strongly dislike politics. You cannot defend the indefensible.
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Edited by - toubab1020 on 14 Sep 2013 15:06:46 |
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toubab1020
12306 Posts |
Posted - 18 Sep 2013 : 12:31:19
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Foroyaa has taken note of the ongoing problem and completed an editorial :
MR PRESIDENT, TIME FOR REALITY CHECK ON SMALL BUSINESSES AND TAXATION
Published on Monday, 16 September 2013 17:50 | Written by Ousman Njie
Foroyaa has been monitoring developments in the economy and we are fully conversant with the fact that the larger than budgeted fiscal deficit constitutes the current account deficit and increase in the domestic debt. Hence your government is trying to expand the tax base to earn more income. The combined force has been going up and down to ensure that more small businesses pay taxes. It is necessary for them to take a break and sit with the GRA and the Ministry of Finance to report their findings so that you could explore new policy directives that would not ultimately wreck the small business community. In our view, the formal sector of the economy is not a major employer. The major income generating source for the population is the informal sector which has its own capacity for raising funds, generating investments and spreading benefits with the intervention of Banks. Small enterprises have spread because wholesale dealers have seen the need to be linked to retailers for the quick disposal of their goods. These retailers have also been spreading their profits by supplying sub retailers who may make up to three thousand dalasis monthly as profit. This is what they utilise to meet their own needs.
Hence if such sub retailers are asked to pay D5000 in any month, they are bound to go bankrupt. Hence as it stands, a cat and mouse game is taking place between your combined force and the sub retailers who close their shops to evade being trapped. This is undermining their earnings without generating any revenue for the state.
It is good for your government to understand that many Gambians are doing what the Mauritanian shopkeepers have been doing and were only successful because the hand of the tax authority had not reached their domain. In short, instead of giving handouts to family members, some of those that have something to sell would request them to take stock from them to sell and retain the profit. Hence many shopkeepers are just middlemen and women. There is no doubt that if some of these businesses are to pay the sums being demanded, they would close down and the state would not have the means to provide retail services.
The absence of retail services is what wrecked Guinea under Saikou Toure which caution us of the dangers of resorting to harsh measures without fully understanding the fundamentals of economics which do not bow down to political dictates. The GRA has been utilising an effective way of moving small businesses into the taxation system by first offering them tax incentives for registering and declaring their just earnings. This could have given rise to findings that would enable the tax authority to establish a ceiling for taxation on Small businesses. In the same vein, GRA could have established an account with the banks for those who have rented income to adopt the policy of pay as you earn and then get their receipts of payment from the Banks which could be accumulated for easy declaration at the end of each year.
If the GRA is not left to work and through trial and error to discover what works so as to standardise it as the regulatory instrument to ensure compliance, Government would sooner or later discover that the policing method will only lead to economic contraction and less taxes. We say that once Casamance and Guinea Bissau become stable, they will serve as catchment areas for capital flight from the Gambia.
http://www.foroyaa.gm/editorial/14169-mr-president-time-for-reality-check-on-small-businesses-and-taxation |
"Simple is good" & I strongly dislike politics. You cannot defend the indefensible.
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