GambiaTax Obligations Detailed

In Gambia, employers face various tax obligations, including payroll taxes, corporate taxes, and contributions to social security and other funds.

Employer Payroll Taxes (PAYE)

The Pay As You Earn (PAYE) system requires employers to deduct income tax directly from employees' salaries and remit it to the Gambia Revenue Authority (GRA). Income tax is calculated based on a progressive tax system with rates ranging from 0% to 25%, applied to the employee's gross employment income. This includes wages, salaries, bonuses, leave pay, overtime payments, fees, allowances, commissions, termination pay, and other supplemental payments. No deductions are allowed when calculating the tax liability. Employees earning less than D2,000 per month or D24,000 annually are exempt from PAYE tax. It is crucial for employers to use the correct monthly tax table available from the GRA for 2025 to determine the precise withholding amounts, as changes to the tax table were implemented starting January 1, 2025.

Corporate Income Tax

Employers operating in Gambia are subject to a corporate income tax, levied on taxable profits. The current corporate income tax rate is the higher of 27% of the taxable profit or 1% of the annual turnover if the company's accounts are audited. This rate increases to 2% of turnover if the accounts are not audited.

Social Security and Other Contributions

Employers must also make social security contributions, contributing a percentage of the employee's salary. Additionally, a 1% contribution of the employee's total earnings (salary plus allowances) is mandatory for the Industrial Injuries Compensation Fund, capped at D15 per month for employees earning above D1,500 monthly.

Value Added Tax (VAT)

Gambia has a Value Added Tax (VAT) of 15% on most goods and services. Businesses registered for VAT must collect VAT on sales and remit it to the GRA.

Other Taxes

Gambia also levies other taxes that employers should be aware of, such as:

• Capital Gains Tax (CGT): Levied on the profit from the sale of certain assets.

• Environmental Tax: A minor tax levied on specific activities.

It's essential for employers to remain up-to-date with the current rates, thresholds, and regulations, as tax laws and regulations can change periodically. Utilizing the services of a payroll provider or tax advisor specializing in Gambian tax law can be immensely helpful in ensuring accurate compliance. Please note that this information is current as of today, February 5, 2025, and might be subject to change in the future.

In Gambia, employee tax deductions, known as Pay As You Earn (PAYE), are calculated on gross employment income and follow a progressive system with rates up to 25% based on income levels.

PAYE (Pay As You Earn)

As of January 1, 2025 the tax-free threshold for personal income tax has been increased to GMD 36,000.00 per annum. The progressive tax rates for 2025 are:

• GMD 0 - GMD 36,000: 0%
• GMD 36,001 - GMD 46,000: 5%
• GMD 46,001 - GMD 56,000: 10%
• GMD 56,001 - GMD 66,000: 15%
• GMD 66,001 - GMD 76,000: 20%
• Above GMD 76,000: 25%

Employers deduct PAYE directly from employee salaries monthly and remit it to the Gambia Revenue Authority (GRA). The deadline for payment is the 15th of the following month.

Other Deductions

Although PAYE is calculated on gross employment income without deductions, other potential deductions related to employment include:

• Social Security Contributions: Employers and employees both contribute to social security. Specific contribution amounts should be confirmed with the GRA due to the lack of current rates.
• Pension Contributions: Employees can contribute to approved pension schemes and deduct these contributions from their gross income, up to a maximum of 25%, after reducing the employer's contributions.

Employer Obligations

In addition to deducting and remitting PAYE, employers must:

• Register with the GRA for PAYE purposes.
• Maintain accurate payroll records.
• File annual PAYE returns, even if employees don't have additional income sources.

Important Considerations

• Non-resident individuals are taxed on Gambian-sourced income only.
• Fringe benefits are typically not subject to PAYE but may be subject to other taxes.
• Ensure all employee contracts comply with Gambian labor laws and regulations.

In Gambia, the Value Added Tax (VAT) is a consumption tax applied to most goods and services.

VAT Rates

• Standard Rate: 15% (applied to most goods and services).
• Zero-Rated: 0% (e.g., exports, international travel, immovable property, gold).
• Exempt: (e.g., basic foodstuffs, education, medical services, medicines, certain tourist services, domestic electricity and water, certain agricultural supplies, financial services).

VAT Registration

• Mandatory Registration: Businesses with an annual turnover exceeding GMD 2,000,000.
• Voluntary Registration: Businesses with a turnover between GMD 1,000,000 and GMD 2,000,000.
• Registration Process: Businesses meeting the criteria must apply to the Commissioner-General within 21 days.

VAT Filing and Payment

• Returns: Filed within 15 days after the end of the tax period, regardless of tax liability.
• Payment Deadline: Same as the filing deadline.

General Information about VAT in the Gambia

• The Gambia's VAT system was introduced in January 2013, replacing the sales tax.
• VAT is administered by the Gambia Revenue Authority (GRA).
• It's important for businesses to maintain accurate records of their transactions, display their VAT registration certificate, issue VAT-inclusive invoices, and advertise prices that include VAT.

Note: This information is based on the latest available data as of February 5, 2025, and may be subject to change due to ongoing updates to tax regulations or future government announcements.

The Gambia offers various tax incentives, primarily geared towards attracting investment and boosting exports.

Special Investment Certificate (SIC)

The SIC is the main incentive scheme, available to both domestic and foreign investors.

• Eligibility: Investing a minimum of USD 100,000 (domestic investors) or USD 250,000 (foreign investors) in a priority sector or area, employing a minimum number of Gambians as set by regulations, or creating value addition. Priority sectors include Agriculture, Fisheries, Tourism, Forestry, Manufacturing, Energy, and other services. Priority regions are the West Coast, Lower River Region, North Bank, Central River Region, and Upper River Region.
• Incentives:
  • Exemption from income tax for five years (priority sectors) or eight years (priority areas).
  • Annual allowance of 15% for building depreciation.
  • Exemption from import duty on capital goods.
  • Exemption from import VAT for five years.
• Application: Submit an SIC application along with required documents such as a detailed project proposal, incorporation certificate, articles of association, memorandum of association, business registration certificate, tax identification number (TIN), evidence of project funding, list of goods to be imported, and if applicable, food safety and quality assurance, and environmental impact assessment.

Export Processing Zone License (EPZL)

This license offers incentives for export-oriented businesses.

• Eligibility: Exporting at least 80% of output. The license allows operation within designated zones for up to ten years.
• Incentives: Benefits include exemptions or concessions on corporate/turnover tax, withholding tax on dividends, VAT on imported direct inputs, import duty and excise duty on imported direct inputs, and municipal tax. For companies exporting at least 30% of output, incentives include a 10% corporate/turnover tax concession for five years and access to financial planning services.

Other Incentives

• Enhanced SIC: For investments of at least USD 5,000,000 in agriculture, fisheries, energy, or technology, extended incentives are available, including an additional five years of SIC benefits and zero withholding tax on dividends for ten years.
• Domestic Investment Certificate: For domestic investments under USD 100,000, incentives include turnover tax exemption for three years, a reduced corporate tax rate of 15% for three years, and an import duty waiver on capital goods.
• Double Taxation Relief: Gambia has double taxation agreements with several countries, offering relief on taxes paid in those countries.

General Tax Information for Gambia:

• The standard corporate tax rate in Gambia is 27%.(As of February 5, 2025). This information is time-sensitive and may change.
• Turnover tax is applicable to businesses with an annual turnover exceeding specified thresholds, however, recent reforms aimed at simplifying the tax system might change this.
• VAT is levied at a standard rate of 15%. Certain goods and services, such as basic food items, are exempt.

It's important to consult with relevant authorities or tax professionals for the most up-to-date and specific information regarding Gambian tax incentives and regulations. Regulations are subject to change, and personalized advice is crucial for accurate tax planning.