By Awa Sowe
In an increasingly digital world, innovative technologies are revolutionising traditional methods of tax collection and enforcement. One such technology gaining prominence is the Digital Tax Stamp, a powerful tool with the potential to transform tax administration, combat counterfeiting, and secure revenue streams for governments worldwide.
The domestic market has fallen prey to unfair competition from counterfeit, smuggled and illicit products, of which the consequences of such products being introduced on the market not only result in the disruption of demand for local products, but also causes loss of Government revenue.
In the quest to fight illicit trade, the Government of the Republic of The Gambia through the Gambia Revenue Authority, is implementing the use of Digital Tax Stamps (DTS) as a source of Domestic Revenue Mobilisation (DRM). DTS are also usually used as a measure of track and trace (T&T) to curb counterfeit products.
The main objectives of introducing digital tax stamps are to protect government revenues, combat illicit trade, promote fair competition in the market and provide real time statistical data for both tax policy and better analysis and audit of the supply chain.
The digital tax stamp on specific excise goods is a tax managing scheme introduced to strengthen tax administration and compliance in line with international best practices. Digital tax stamps allow to monitor, track and trace the movement of excise goods throughout the supply chain.
In a recent development, The Gambia Revenue Authority (GRA) collected D48, 470,427.78 between January and August 2024, compared to D6, 312,608.78 in the same period of 2023. This increment is more than 800% of the total revenue mobilisation of excise duty.
In February 2024, the government of The Gambia entered into the Public Private Partnership (PPP) agreement with SICPA SA, a Swiss company, through the Ministry of Finance and Economic Affairs, with GRA as the implementing agency.
“It is worth noting that from January 2023 to August 2023, the GRA collected D6, 312,608.78 on excise duty from manufacturers and importers. For the same period this year, the Authority collected D48, 460,427.78 on excise duty despite the low level of compliance. This shows that with the introduction of the SICPA project, revenue in excise stamps has increased significantly, ” GRA boss said in a press release on Wednesday, 11 September 2024.
The nation’s main revenue mobilisation agency indicates that the SICPA agreement is intended to implement revenue mobilisation solutions for excisable goods, telecom services, and refined fuels to generate more revenue to provide better services for all Gambians.
“This project is part of the reform priorities for the Gambia Revenue Authority under the current strategic plan 2020-2024, which seeks to take advantage of the efficiency digitalisation offers,” it declared.
GRA DG added that the collection of excise duty has persistently remained below expectation due to illicit trade, under-declaration, and inefficiencies in the monitoring of these products. “This has resulted in loss of government revenue and unfair competition for legitimate, law-abiding manufacturers and importers”.
The agency acknowledges the significance of the digital stamp in its desire to combat illicit trade and the protection of government revenue.
“Introducing digital stamps will help combat the illicit trade of smuggling, counterfeiting, and under-declaration as well as protect government revenue. They will ensure that products in circulation have paid the applicable taxes because GRA will be able to track and trace products throughout the entire supply chain. It will create a business environment of fair competition where all businesses will pay their fair share of taxes as excise products will be marked and traced,” Gambia Revenue Authority further explained in the release.
He however the Authority further stated that after a series of publications to notify businesses, some still failed to comply.
As governments worldwide grapple with the complexities of modern taxation and supply chain management, Digital Tax Stamps emerge as a transformative solution with far-reaching implications. By harnessing the power of digital technologies, governments can strengthen tax compliance, combat counterfeiting, and foster sustainable economic growth for the benefit of society as a whole. The future of taxation is digital, and Digital Tax Stamps are leading the way towards a more transparent, efficient, and equitable tax system.
