The following is culled from FRROYAA BURNING ISSUEs NO: 83/2002 12 - 15 December, 2002 At The National Assembly Halifa Sallah's Reaction To The Estimate 2003 Sitting Of 3rd December 2002 This session is the most important session because we are dealing fundamentally with the economic life of the country. The Honourable SoS indicated that the strategic objective of the estimate is ultimately to promote poverty reduction that the idea is for the government to stabilize the economy relying more on grants in terms of containing the deficit and move further to promote programmes that will lead to poverty reduction. Essentially, Halifa said we have three considerations to make; to reduce poverty, we have to enhance productivity we must generate work. That budget should promote regeneration of work. To regenerate work, there is need for investment. That is the way we can work toward reducing poverty. In order to invest, Halifa said, then people must be willing to take certain risks to build up the type of economy that the government commits itself to, that is the private sector being an engine of growth. Halifa indicated that the first consideration is how the budget is actually structured. He went on to referred to the analysis of expenditure and indicated that the actual estimate for 2001 is not stated and the approved estimate for 2002 is stated and the revised estimates for 2002 is also stated. He asked a question how we go up to 2003 without having the actual expenditure of 2001. He also asked who authorizes the revision of the estimates after approval by the National Assembly. He added that under section 152(a) this assembly is empowered to approve the estimates. It states categorically; "The National Assembly shall within 14 days of the estimate being laid before it, shall give consideration to and approved the estimates. Well it will be good for the Secretary of State in his deliberation, to actually indicate how revising the estimates come into being. He added that it is a constitutional requirement that National Assembly shall exercise control over the whole utilization of expenditure. He further went on to say that if you look at the estimate, it has two components, the revenue component, and the expenditure component. On The Revenue Component Halifa indicated that the composition of the revenue is in page 1. It gives us an abstract of the revenue or sources of income for the country. Income tax, is going to generate D309 million and if we look at the breakdown, personal income tax is to generate D126,400,000 and income tax for companies equals D163,500,000. Personal income tax is very substantial. Halifa argued that, going back to the considerations he made earlier, if we do not enable people to earn, then I don't know how those people will be enable to invest. Halifa argued that this need to be taken into consideration. Halifa indicated that he do not know whether a strategy has being developed to help those people who are low income earners to move away from paying payroll tax. Halifa indicated that if it is progressive taxation, that is enabling those at that the low income bracket to be free from taxation, then that will be a progressive move that should be the trend of our fiscal policy. If you look at page 2 again, the other item taxes on goods and services. Halifa said, it is going to contribute D416,400, 000 and taxes on international trade D467,180,000. Halifa argued that if we combine taxation alone, we are talking about D1,192,610,000 that is essentially the revenue being generated from taxation out of a budget of D1,733,095,879. Taxation is the core of our revenue we have to ask the question. When will we be able to save to actually invest in the productive base of the economy? How is government helping the productive sector to build up through this fiscal approach to our budget? Halifa Sallah indicated that if we go further to look at the other components of the budget, we are talking about government service charge, pensions, interest payment, repayment of loan, capital revenue, non-project grant. What I'm trying to emphasise here, Halifa said, if you look at that grant component of D328 million is the largest component of the non tax revenue, which means, we are depending heavily on grants apart from taxation. Halifa indicated that taking the introductory remarks made by the SoS, it seem that grants are declining and they are now being substituted by loans. We will be depending mainly on taxation on goods and services from international trade. We are talking about importation of commodities being the principal base of our revenue. Should we rely on this? What alternative do we have? "Are we projecting into the future, taking into consideration that the re-export trade is helping us a great deal in expanding import which provides us with the revenue that we need?" Halifa asked. Suppose the border crisis continues, he said, and we find it difficult to be able to re-export, what would that mean to this tax base? "What would happen to the foundation of the economy? How would we finance our expenditure?" he asked. Halifa said that this has to be taken into consideration and I would like the SoS to actually indicate what is in place, what thinking is in place to be able to handle this particular problem, he said. TO BE CONTINUED -------------------------------------------------------------------------- Source: FOROYAA (Freedom) NO: 83/2002 12 - 15 December, 2002 ISSN: 0796- 08573 Address: FOROYAA, P.O.Box 2306, Serrekunda, The Gambia, West Africa Telephone: (220) 393177 Fax: (220) 393177 Email address: [log in to unmask] -------------------------------------------------------------------------- ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ To unsubscribe/subscribe or view archives of postings, go to the Gambia-L Web interface at: http://maelstrom.stjohns.edu/archives/gambia-l.html To contact the List Management, please send an e-mail to: [log in to unmask] ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~