In The Gambia, employers have several tax responsibilities. They are required to make contributions to the Social Security and Housing Finance Corporation (SSHFC). This includes a 10% contribution of an employee's basic salary towards the SSHFC's social security scheme, which encompasses pension provisions and other benefits. Additionally, employers contribute 1% of an employee's gross monthly salary to the Industrial Injuries Compensation Fund. This fund is designed to provide compensation for workplace accidents and occupational illnesses.

Provident Fund Contributions

The Gambia also has a mandatory Provident Fund scheme. Employers are required to contribute 10% of an employee's basic salary to this fund.

Payroll Tax Responsibilities

While employers in The Gambia do not pay a separate payroll tax, they are responsible for the accurate calculation, withholding, and remittance of employee income tax, also known as Pay-As-You-Earn (PAYE), via payroll deductions.

Other Potential Payments

Employers may also need to contribute to the National Education Levy, depending on the business's annual revenue. This is charged at a rate of 0.75% of annual gross revenue. Additionally, specific fringe benefits provided to employees by the employer may be subject to the fringe benefits tax.

Calculation and Payment Deadlines

Employer contributions are calculated as a percentage of an employee's salary and paid to the SSHFC on a monthly basis. Employers are also required to submit PAYE returns and remit the withheld income tax. Specific deadlines apply for payment and filing.

Importance of Compliance

Compliance with all regulations for social security, the Provident Fund, and taxation is crucial for employers in The Gambia. Failure to do so can result in penalties or fines. Using a payroll service or a qualified tax advisor in The Gambia can ensure accurate calculations and timely submissions.

In The Gambia, the progressive income tax system known as Pay-As-You-Earn (PAYE) is used. The tax rates for 2023 are as follows:

• Up to GMD 7,500 annually (GMD 625 monthly): Exempt from income tax.
• GMD 7,501 – GMD 17,500 annually: 10%
• GMD 17,501 – GMD 27,500 annually: 15%
• GMD 27,501 – GMD 37,500 annually: 20%
• GMD 37,501 – GMD 47,500 annually: 25%
• Above GMD 47,500 annually: 30%

Social Security and Provident Fund Contributions

Mandatory contributions are made by employees in The Gambia to the following:

• Social Security: Employees contribute 5% of their basic salary to the Social Security & Housing Finance Corporation (SSHFC).
• Provident Fund: Employees also contribute 5% of their basic salary to the Provident Fund scheme.

Calculation and Withholding of Deductions

The calculation of PAYE income tax, social security contributions, and Provident Fund deductions are based on an employee's gross salary. These amounts are withheld from employee paychecks and remitted to the relevant authorities on a monthly basis.

Understanding Your Payslip

It's important for employees to carefully review their payslips to ensure accurate deductions. Any questions about deductions should be addressed to your employer or a tax advisor familiar with The Gambia's system.

The Gambia operates a VAT system that applies to the supply of most goods and services within the country. The standard VAT rate in The Gambia is 15%. This rate is applied to the taxable value of most services.

Zero-Rated Services

Certain services in The Gambia have a zero-rated VAT status. These include financial services, exported services, specific educational services, and specific medical services.

Exempted Services

Some services may be exempt from VAT in The Gambia. These exemptions can include basic necessities and some essential services, as well as certain services provided by the government and non-profits.

VAT Liability for Services

The location where a service is considered to be supplied is crucial for determining VAT liability. In general, services are deemed supplied where the supplier is established. However, specific exceptions apply, such as services related to immovable property, which are taxed where the property is located.

For B2B (Business-to-Business) services, the reverse charge mechanism may apply if the recipient of the service is a VAT-registered business. For B2C (Business-to-Consumer) services, the business generally charges VAT to the customer.

VAT Implications for Cross-Border Services

When services are provided by a business outside of The Gambia to a customer within The Gambia, the customer might be liable to account for the VAT under the reverse charge mechanism. Services exported from The Gambia are generally zero-rated for VAT purposes.

VAT Registration and Compliance

Businesses exceeding a specific annual turnover threshold are required to register for VAT in The Gambia. Registered businesses must collect VAT, file regular VAT returns, and remit the collected VAT to the tax authorities.

VAT regulations for services can be quite complex, especially for cross-border transactions. It's strongly advised to consult with a tax advisor or VAT specialist familiar with The Gambia's system to ensure compliance and avoid any tax liabilities.

The Gambia offers a range of tax incentives to attract foreign direct investment (FDI) and stimulate business growth. These incentives are administered by the Gambia Investment and Export Promotion Agency (GIEPA). There are two main programs offering tax benefits: Special Investment Certificates (SICs) and Export Processing Zones (EPZs).

Special Investment Certificates (SICs)

The SIC program grants tax breaks to businesses operating in designated "priority sectors" or "priority regions". Here are some of the key benefits available under the SIC scheme:

• Income Tax Exemption: New businesses can enjoy exemption from corporate income tax for five years in priority sectors and eight years in priority regions.
• Import Duty and VAT Exemption: Businesses with SIC status can import capital goods and certain materials free from import duty and import VAT for a specified period.
• Accelerated Depreciation: Companies can claim a higher annual allowance for depreciation of buildings compared to the standard rate.

Eligibility for SICs

To qualify for an SIC, businesses must meet specific criteria, including:

• Minimum investment amount (usually USD $250,000)
• Operation within a designated priority sector or region
• Fulfilling certain employment generation or training requirements

Export Processing Zones (EPZs)

EPZs are designated areas within The Gambia that offer a business-friendly environment with simplified regulations and significant tax breaks. Companies operating within an EPZ can benefit from:

• Reduced Corporate/Turnover Tax: EPZ businesses can enjoy a concession on corporate or turnover tax, depending on the level of exports.
• Tax and Duty Exemptions: Companies can import machinery, raw materials, and other inputs free from import duties and taxes.
• Simplified Regulatory Framework: EPZs often have streamlined procedures for business registration, work permits, and other administrative tasks.

Eligibility for EPZs

To be eligible for an EPZ license, companies must typically:

• Be engaged in export-oriented activities (minimum export percentage requirements apply)
• Demonstrate financial viability and value addition
• Generate employment opportunities

It's crucial to consult with Gambian tax authorities or a professional advisor to determine which program (SIC or EPZ) best suits your specific business needs and to ensure compliance with all applicable regulations.