|Speaker Abdoulie Bojang|
Lawmakers in the Gambian capital, Banjul on June 26, 2012 unanimously approve the three Bills: the ECOWAS Value Added Tax (VAT) Protocol, Amendments to the IMF Articles of Agreement, and the African Legal Support Facility (ALSF).
The three international legal instruments were tabled by the Minister of Finance and Economic Affairs, Mr. Abdou Kolley, before the National Assembly in its Second Meeting of the 2012 Legislative Year.
Speaking on the VAT, Mr. Kolley said the Authority of Heads of State and Government of Economic Community of West African States (ECOWAS), signed the Value Added Tax (VAT) Protocol A/P2/7/96 in Abuja, Nigeria in July 1996.
Member States are obliged to adopt the VAT Protocol as part of efforts to harmonize indirect tax legislations and policies to encourage increased intra-community trade on a non-discriminatory basis.
Before Tuesday’s approval, The Gambia and Guinea Bissau were the only countries yet to introduce the VAT, compelling the sub-regional economic bloc to issue a Ministerial Directive in 2009 to provide technical and financial support to the two non-VAT compliant countries to enable them accelerate the rate of ratification and implementation.
“The protocol provides guidance for the legal and administrative design of VAT within the Sub-region, and shall be a general consumption tax to replace the other indirect taxes charged on turnover such as sales tax,” Minister Kolley explains.
He said it will target economic activities supplied for consideration unless they are exempted from the VAT base, for instance - salaried activities.
Some of the exemptions are aimed at ensuring that the VAT limits its scope to consumption taking place in a country, an important design feature of the tax in all jurisdictions where it is applied.
The Protocol gives guidance in the determination of the VAT-base for both import and domestic transactions. It also address the importance in forecasting the revenue yield of the VAT compared to the sales tax which it has replaced in all the countries.
According to the Minister, the charges for the VAT will begin from January 1, 2013. The government has already incorporated the relevant provisions of the Protocol into the Income and Value Added Tax Bill, 2012.
Speaking on the Amendments to the IMF Articles of Agreement, Mr. Kolley noted that for the past few years, the International Monetary Fund (IMF) has been engaged in a review of its governance structures; with a view to make the institution more representative of current realities.
These reforms have focused on two main areas: A General Revision of Quotas; and Reform of the Executive Board. The former was the first to be completed and was earlier presented to Cabinet and subsequently ratified by the National Assembly in 2010, he said.
In December 2010, the IMF approved the proposed amendments to the reform of the Executive Board, which are now being submitted to parliament for approval, he added.
The reform of the Executive Board can only be fully implemented in accordance with Article XXVIII and the terms of Board Resolution No.66-2, when three-fifths of Members States, having 85% of the total voting power, ratify and accept the proposed Amendments on the Reform of the Executive Board.
According to Mr. Kolley, as of April 4 this year 68 members countries with a total voting power of 45.96% ratified the proposed Amendments to the Articles of Agreement, including 15 amendment proposals put forward to be ratified by member countries, The Gambia among them.
The proposed amendments include: Increasing the number of Executive Directors on the Executive Board; election procedures of Executive Directors; terms of office of executive directors (election intervals, voting powers of the Executive Directors, members or group of members and number of votes allotted to members or group of members).
He said proposed amendments to the Articles of Agreement will increase the voting and representation of the Constituency in the Executive Board of the IMF through provision of a Second Alternate Executive Director, among others.
The African Legal Support Facility (ALSF) was also ratified last Tuesday.
It was established in 2008 by the African Development Bank (AfDB) as an international legal institution to: Provide legal advice and services to African countries in creditor litigation; Provide technical legal assistance to African countries to strengthen their expertise and negotiating capacity in matters pertaining to debt management and litigation, natural resources and extractive industries management and contracting , investment agreements, and related commercial and business transactions, as the case may be; and Strengthen process in African countries.
On May 15, 2012, the Government of the Gambia signed the agreement establishing the ALSF. The Minister said its ratification would make the country a full member and will be eligible for technical and financial support in public-private partnership arrangements and structuring of complex financial deals financed by the Facility.
Though membership to the ALSF is open to all sovereign nations, the AfDB, and other international organisations, only 42 member countries and three international organisations have sign to the Treaty establishing it.
It has been fully operational and is actively recruiting additional members and support for its operations, Mr. Kolley said. The ALSF is supported by voluntary contributions, allocations of net income from the AfDB and income accruing from the ALSF’s endowment fund.
An initial sum of $16 million was contributed by the AfDB to help establish the ALS Facility, the minister revealed. The ALSF is hosted by the AFDB, but operates independently and maintains the same privileges and immunities enjoyed by other international organisations.
Source: The Voice