|
Momodou
Denmark
11835 Posts |
 Posted - 03 May 2007 : 10:54:45
|
Foroyaa Editorial:
THE GROWING TREND OF TAXATION
The role of taxation in bringing about social development is more important today than ever before. Development is inconceivable without investment. Social development that is equitable has been the object of progressive taxation. Progressive taxation does not lead to the scraping of the back of the poor tax payer nor does it undermine progressive investment into the productive base of the economy.
In short, taxation should not be a burden or fetter to the eradication of poverty or the expansion of the productive base of the economy. One problem that is featuring prominently in the Gambia is the emergence of the type of taxation that is obstructing the promotion of the general welfare and production.
The debate among development specialists is the role of the state and private sector in bringing about socio-economic development. Some claim that the state should move away from owning productive enterprises and restrict itself to the provisions of social services by levying taxes on income and private enterprises.
Other development specialists claim the State should be a part owner of productive enterprises and depend on dividends to maintain services. According to them, a state which has sources of dividends will rely less on taxation to finance public services.
In The Gambia, the State does own many public enterprises but the dividends derived from them are grossly negligible, despite the high cost of the services such as electricity, telecommunication and port charges.
Hence, the State still depends largely on taxation to maintain social services. In 2006, taxation on income amounted to 260 million dalasis. In 2007, the sum is supposed to increase to 350 million dalasis. Furthermore, taxation on enterprises is supposed to increase from 425 million in 2006 to 485 million dalasis in 2007. In short, the income of the country from taxation rose from 2. 7 billion in 2006 to 2.9 billion in 2007. Currently, the taxation system has no regard for the poor or the emerging enterprises. The taxation system therefore needs to be reviewed to ensure that it does not lead to the scraping of the back of the poor, as well as to arrest investment initiatives into the productive base of the economy.
In order to rationalise the taxation system and make it progressive, local government and central government should harmonise their taxation system to avoid excessive double taxation on income and enterprises. Furthermore, tax exemption should be linked to any income that is less than one dollar a day. The percentage of taxation should be variable according to income with those having lower incomes carrying a lighter tax burden per percentage. Thirdly, a strategy should be developed to identify companies that are reinvesting in the productive base to expand employment and income as well as those that plough resources into social services and give them tax exemption so as to facilitate their growth and development.
Source: Foroyaa Newspaper Burning Issue
Issue No. 50/2007, 2 – 3 May 2007
|
A clear conscience fears no accusation - proverb from Sierra Leone |
|
Topic Locked
