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Gambia

Country Name: Republic of The Gambia
Currency: Gambian Dalasi (GMD)
Primary Tax Authority: Gambia Revenue Authority (GRA)
Key Legislation:

  • Income and Value Added Tax Act
  • Customs and Excise Act
  • Investment and Export Promotion Act
  • Tax Procedures Code

Fiscal Authority Allocation

Centralized Fiscal System:
The Gambia operates a centralized tax system, with the Gambia Revenue Authority (GRA) responsible for the administration and collection of taxes, including corporate income tax (CIT), personal income tax (PIT), value-added tax (VAT), and customs duties.

Corporate Income Tax (CIT)

Standard Rate: 31%
The Gambia imposes a corporate income tax rate of 31% on resident companies and non-resident companies with a permanent establishment in the country.

Corporate Forms and Taxation:

  1. Resident Companies: Taxed on worldwide income.
  2. Non-Resident Companies: Taxed only on Gambian-sourced income.

Exemptions and Incentives:

  • Investment Incentives: Under the Investment and Export Promotion Act, The Gambia offers tax holidays, customs duty exemptions, and VAT relief for companies investing in key sectors such as agriculture, tourism, energy, and manufacturing.
  • Special Investment Zones: Companies operating in designated Special Investment Zones benefit from a five-year tax holiday, customs duty exemptions on imports, and VAT exemptions.

Goods and Services Tax (GST) / Value-Added Tax (VAT)

Standard Rate: 15%
The Gambia imposes VAT at a standard rate of 15% on most goods and services. VAT applies to domestic production and imports.

Exemptions:
Certain goods and services, including unprocessed agricultural products, healthcare, education, and financial services, are VAT-exempt. Exports are zero-rated, allowing businesses to reclaim VAT paid on inputs used in export production.

Personal Income Tax (PIT)

Progressive Rates:
The Gambia applies a progressive personal income tax system to residents’ worldwide income and non-residents’ Gambian-sourced income.

Resident Tax Rates for 2023 (Annual Income):

  • Up to GMD 18,000: 0%
  • GMD 18,001 to GMD 28,000: 5%
  • GMD 28,001 to GMD 38,000: 10%
  • GMD 38,001 to GMD 48,000: 15%
  • Above GMD 48,000: 30%

Non-Resident Tax Rate:
Non-residents are taxed at a flat rate of 15% on Gambian-sourced income.

Deductions and Allowances:
Deductions are available for pension contributions, social security payments, and certain personal allowances, including medical expenses and charitable donations.

Additional Mandatory Contributions

Social Security Contributions:
Employers and employees must contribute to The Gambia’s social security system, which covers pensions, healthcare, and other social welfare programs.

  • Employer Contribution: 10% of gross salary.
  • Employee Contribution: 5% of gross salary.

Withholding Taxes

  • Dividends: 15%
  • Interest: 15%
  • Royalties: 15%
    The Gambia imposes withholding taxes on payments to non-residents, including dividends, interest, and royalties. Withholding tax rates may be reduced under double taxation agreements (DTAs).

Transfer Pricing Rules

The Gambia adheres to the arm’s-length principle for related-party transactions. Companies with significant cross-border transactions must ensure that prices reflect market value. Transfer pricing documentation is required for multinational corporations.

Special Tax Regimes

  • Special Investment Zones: Businesses operating in designated Special Investment Zones enjoy CIT holidays, VAT exemptions, and customs duty relief on imported equipment and raw materials for up to five years. These zones aim to attract investment in manufacturing, agriculture, and tourism.
  • Investment Incentives: The Gambia provides tax holidays, reduced tax rates, and customs duty exemptions to companies in key sectors such as agriculture, renewable energy, and tourism. These incentives are designed to promote foreign direct investment (FDI).

Other Taxes

  • Customs Duties: The Gambia imposes customs duties on imports, with rates varying from 5% to 20% depending on the type of goods. Raw materials and machinery may benefit from reduced or zero customs duties.
  • Excise Taxes: Excise taxes are levied on goods such as alcohol, tobacco, and petroleum products.
  • Property Tax: Local governments impose property taxes on real estate, based on the assessed value of land and buildings.

Double Taxation Agreements (DTAs)

The Gambia has signed several double taxation agreements (DTAs) with countries including the United Kingdom and countries within the Economic Community of West African States (ECOWAS). These agreements help reduce withholding taxes on cross-border income and prevent double taxation.

Local Taxes

Local authorities in The Gambia may impose minor taxes such as property taxes, business registration fees, and local levies. However, most major taxes, including CIT, PIT, and VAT, are centrally administered by the Gambia Revenue Authority (GRA).

Compliance and Reporting

Annual Filing:
Corporate tax returns must be filed by the end of the fourth month following the end of the financial year. Personal income tax returns are due by March 31st. VAT returns are typically filed quarterly, depending on the business’s size and turnover.

Penalties for Late Filing:
Penalties for non-compliance or late filing include fines and interest on unpaid taxes. The GRA charges interest at 1% per month on overdue taxes, with additional penalties for underreporting or tax evasion.

Recent Developments

Focus on Renewable Energy:
The Gambia is actively promoting investment in renewable energy projects, particularly solar and wind energy. Companies investing in renewable energy infrastructure can benefit from CIT holidays, customs duty reductions, and VAT exemptions on imported equipment.

Tourism Sector Incentives:
To boost the tourism industry, which is a key sector for The Gambia, the government offers tax incentives such as reduced CIT rates and VAT exemptions for hotel and resort developers. The aim is to attract more foreign direct investment into the hospitality sector.

Digital Economy and E-Commerce:
The Gambia is exploring taxation of the digital economy and e-commerce. Efforts are underway to modernize tax collection, improve compliance, and capture revenue from digital transactions and online services.

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