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
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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]
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