Dear Basil,
This is exactly the point. This move will discourage importers from bringing
their goods into the Gambia, and l have already heard that some have already
started taking their shipments to neighbouring countries like Bissau.If you
consider the fact that a lot of the wholesalers who import into Gambia sell
the bulk of their goods to the buyers from the neighbouring countries
anyway, what this move has done is give these neighbouring countries the
customs revenues as well as deprive the average Gambian transportation
business owner of the revenue he or she would have earned from transporting
some of the goods to neighbouring countries for the buyers who used to come
to Gambia to shop. Clearly, this move does hurt the Gambian consumer and our
prospects for an improved economy as well as discourage the engagenment in
commerce by the business person whose resources are already very limited.So
my opinion also is that it was not a very well studied move.
It is unfortunate and very true that over the years, many business people
have defrauded the government by finding all sorts of ways to avoid paying
any or the appropriate amount of duty on their goods, but like you, l feel
that they could have explored another means of solving this problem.The
problem is also not just the importers, but corrupt customs officials who
accpted bribes as opposed to executing their duties honestly, and this in
turn is compounded by poor salaries etc, etc, Ad Infinitum.
l know it is not feasible for customs officials to have to go through every
shipment piece by piece, but even though l am not an economist, l know there
must be some way of estimating the value of certain goods. Baring that, why
is it that the customs themselves did not take up this task that this French
company is doing and keep the revenues in the country? For example, they
could have just gone through shipments piece by piece and charge the importer
the extra labour cost if they do not produce an invoice with a reasonable
value for their goods.
I agree that encouraging the private sector by legislation that helps and not
hinders their progress is the only way to eliminate massive poverty, but
somehow, those in a position to bring this about have completely missed the
point, and this is very unfortunate.Another lesson to prove that one cannot
govern properly without imput from those whom they are there to serve.
Jabou
Hi Bro. Habib and Sis Jabou,
The BIVAC pre-shipment issue is very contentious and there
is no guarantee that imposing another layer of bureaucracy
will solve the problem of underinvoicing. From what i have
been reading in the newspapers, the BIVAC pre-shipment
announcement was a suprise to the private sector. While I
agree that the government needs to maximize its revenue
collection, my personal opinion is that there should have
been more consultation between the government, the
operators and the chamber of commerce. I don't want to
believe that ALL importers are engaged in underinvoicing.
Could the culprits not be identified and then appropriate
action taken. Why should the righteous be penalized and
suffer with the evil.
If the government keeps squeezing the private sector in the
guise of raising revenue, it is potentially
counterproductive and the reverse can happen. The
commercial, economic growth and employment prospect of the
economy can be seriously hampered.This is against the
backdrop that 65%-70% of revenue comes from customs
revenue. This starkly contradicts the government's stated
objective of vision 2020 which is to have a viable private
sector led Gambian economy (inconsistency).
BIVAC are working for profits and the question to be asked
is BIVAC the only alternative available to the government
to solve the problem of revenue collection?. The $250 (paid
in foreign currency puts another extra pressure on the
exchange rate)and whatever fees, is paid for by the private
sector and no businessperson will accommodate the cost
without passing it on to consumers i.e. the urban and rural
poor that have to purchase the goods and services provided
by importers. In otherwords the economic cost of BIVAC will
be passed on to the poor consumers. Inevitably prices will
have to rise to cover the cost of employing BIVAC.
I also read from the newspaper that importers from
neighboring countries are stopping to use the Banjul
facilities because there will no longer be any incentive
and economic benefits to them from importing through
Banjul - another source of revenue foregone because the
reduction of imports will ultimately mean a reduced revenue
base for the government. So the assumption that BIVAC
automatically increases revenue and stops underinvoicing is
not 100% certain without even considering the
administrative delay and cost in terms of valuable time.
My personal preference and what i would have loved to see
is the government engaging in consultation and dialogue
with the private sector through the chamber of commerce.
After all that's what the GCCI is there for: to act as a
bridge between the government, private sector and
consumers. That could be another least costly alternative
whereby Gambians will be solving a principally Gambian
problem than inviting foreigners who will take their
profits and when things are not going well leave the
country and we have to pick up the pieces - remember the
electricity saga with MSG and UHC or whatever the name was.
The last statistics i saw on the Gambia, the level of taxes
from international trade was down on its pre 1994 level. By
inviting BIVAC is it also an admission on the part of the
government that the C&E have failed in executing their
duties or is there a lack of confidence in their abilities.
The problem can also be more structural than that.
Recently on the L we have been taking about reducing the
level of poverty in Gambia both absolute and relative
poverty, urban and rural poverty as well. Improving the
living standards of the average Gambian can only take place
within the parameters of a growing and well managed economy
that provides opportunities.There is a limit as to what the
government can do to directly employ Gambians, that's why
it is said that a government should concentrate on
providing public goods i.e health and education and
ensures throught its polices the "necessary and enabling
environment for the private sector to function
efficiently". The majority of labor force are employed
outside the government sector and we cannot kill the golden
goose that lays the foundation to reduce poverty. How can
both foreign and domestic investors be attracted when the
tax burden on them is high. We also have to take into
cognizance the fact that Gambia is competing with
neighboring countries for scare foreign dollars and it is
quite obvious that investors will invest in countries where
there is less administrative bureaucracy.
I don't want to prejudge what BIVAC can achieve, but only
time will tell.
Cheers
Basil
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