Saturday, August 24, 2019

National Assembly Reduces Tax on Alcoholic Beverages

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By Awa B. Bah

The tax on alcoholic beverages has been reduced by the National Assembly (NA) on Monday, 29th July 2019 during an extra-ordinary session.

The Minister of Finance and Economic Affairs, Mamburay Njie tabled the motion before the lawmakers for consideration and adoption of the proposed revised excise tax on alcoholic beverages. Minister Njie said the motion was brought in accordance with Section 149 of 1997 which according to his submission requires the approval of the National Assembly before any tax could be imposed, altered or revised.

Njie told the legislators that the increment on excise tax on alcoholic beverages was part of the policy proposal imbedded in the Appropriation Bill 2019 that was approved by deputies in 2019 to be effective on January 2019.

He said the increment on the said excise tax which was proposed by the Ministry of Finance  was done in good faith and approved by the , but it came with its own challenges and was unrealistic for implementation and therefore created and continues to create challenges in the industry.

He said his ministry together with stakeholders held several consultations on the effects and challenges on the implementation of the approved rate on excise tax, with a view of resolving the matter amicably in the supreme national interest. He added that resulted in a more broad-based resolution.

He noted that the approved new excise tax was in no way an intended target of a specific sector but rather propelled by a growing need to initiate a social safety net for the youth from the negative effects of alcohol abuse due to lower price. He added that road safety over the years have already been compromised by drunk-driving mostly by the youth.

According to the Minister, Banjul Breweries alone paid D132 million to the Gambia Revenue Authority which was a plus to the economy and its closure, would bring economic losses to The Gambia.

The National Assembly approved the reduction on the excise tax on alcoholic beverages.

The approved estimates of the 2019 fiscal year which came into effect on January 2019, brought an increment on taxation of goods especially on alcoholic beverages.

About Banjul Brewery

It was revealed that a Banjul brewery is the sole beer-producing company in The Gambia. The company was established by a Gambian called John Blain in 1975. The company made its first production in 1977, that after 42 years of production, it has gained national and international recognition with several awards to their name.

As a result of the increment, it is said the sales of products of Banjul breweries, have dropped drastically due to low sales volumes.

According to the motion, the 75% increment in taxation on alcoholic beverages has caused an increment on the prices of the products and consequently, wholesalers could not buy as much quantity as they used to and this has led the consumption capacity of consumers to drop. This, according to the motion could be attributed to the increase in price as their purchasing power cannot allow them to buy the volume as they used to.

After the laying of this paper by the minister, deputies took turns to comment before it was finally considered and adopted. See Foroyaa next edition for comments from the various NAMs on the subject matter.

The Banjul Breweries employs around 200 staff, that in this year, 18 casual staff were laid off due to the unfavourable tax climate.

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