Monday, September 11, 2017

A case for the disaggregation of the G.R.A.

The Gambia Revenue Authority (GRA) was established in 2004 by an Act of Parliament (National Assembly).  It merged the Customs and Excise and the Income Tax Departments.  In a statement posted on the GRA website, the current Director General claims that his agency collects “about 20% of GDP and 80% of government revenue” thus making it the premier revenue collection agency of the government.

The rationalization of government departments, as well all major restructuring exercise in the private sector, is driven by the primary objective of enhancing efficiency and thus increasing the revenue (profit) streams of the operation.   The same concept generally applies to the private sector as well.

In the case of the GRA, the rationale is no different.  But has centralization increased both efficiency of operations and increased revenue?  The jury is still out on both questions.  And we are being charitable on the efficiency question for lack of tangible evidence resulting from unreliable data in the era of Jammeh.  One this can be said is that the rollout of the Value Added Tax did not inspire confidence in the new GRA and was considered a disaster that left great many businessmen and women, especially the petty traders and small businesses, frustrated, confused and felt cheated. 

We have written numerous blog posts for a number of years on the subject and you can find some of them here and here and here.  The efficiency issue is not specific to GRA but it is a civil service-wide problem that the new administration must respond to, perhaps in conjunction with a total review of the Government Statistics Bureau. 

Back to the efficiency and enhanced revenue collection capacity, centralization always concentrates power in the hands of the few.  In the case of the GRA, as we have seen time and time again, in the ear of Yaya Jammeh, the DG of GRA is the focal point of every budgetary intervention demanded by the Office of The President, whether legal or – mostly – illegal demands on the agency.  Either it is transfer of collected revenue that belongs to the Gambian people to the private business entities of Jammeh or for his private use. 

By centralizing the revenue collection capabilities of an entire government into what we now called the GRA,  Jammeh has created a one-stop-shop to satisfy his insatiable thirst for hard cash by issuing the now infamous Executive Orders (EOs) to one man, as opposed to having to deal with two or more individuals - say the Director General of Customs and Commissioner of Income Tax – which increases the chances of one of them proving to be the bulwark that prevents the type of abuse to the system that is being revealed in the Commission of Inquiry into his illicit wealth.

Reverting to the previous status of having a Director General of Customs and Excise and a Commissioner of Income or Domestic Tax would return competitiveness between the revenue collection centers that made the inter-departmental rivalries good for government’s bottom line.  Those old enough to remember, the most anticipated portion of the Annual Budget Speech of the Finance Minister was the section dealing with the revenue and loss column of the parastatals.   Only the Managing Director of NAWEC would dread having a return of this feature of the annual event.

Finally, it is oxymoron to centralize government revenue collection while in the same breath promoting the decentralization of government services which goes hand and clove with power of the purse strings. It is time the Barrow administration consider disaggregating the GRA into smaller manageable agencies which is more consistent and supportive of government’s long-held policy of devolving power from the center to the provincial areas of the country.