By Kebba A.F. Touray
The Ministry of Interior has told the Finance and Public Accounts Committee (FPAC) that it will recover D5.7 million in withholding tax following an audit query raised in the government’s 2025 audited accounts.
The commitment was made in the ministry’s management response during FPAC’s examination of the 2025 Government Accounts, which were presented to the committee by the Accountant General’s Department (AGD).
The National Audit Office (NAO), in its audit of the 2025 government accounts, reported that the Ministry of Interior had failed to deduct withholding tax amounting to D5.7 million from payments made under certain contracts.
According to the audit report, the withholding tax was not deducted in line with the country’s income tax and Value Added Tax (VAT) requirements.
The auditors recommended that the ministry recover the outstanding amount and provide evidence of the recovery to the auditors for verification.
“We noted that withholding tax amounting to D5,700,000.00 was not deducted by the Ministry of Interior,” the audit report stated.
The auditors further recommended that “the Ministry should ensure the amount is recovered in accordance with Income and VAT tax requirements” and submit details of the recovery to the auditors for confirmation.
In its response, the Ministry of Interior acknowledged receiving the audit query relating to the non-deduction and remittance of withholding tax on payments made to Toppan Security Limited.
The ministry explained that withholding tax amounting to D3,771,656.46 was not deducted because the company’s contract contained a tax allocation clause dealing with withholding tax obligations.
“The reason for the non-deduction of withholding tax, resulting in an amount of three million seven hundred seventy-one thousand six hundred fifty-six dalasis and forty-six bututs (GMD 3,771,656.46), is that Toppan Security Limited’s contract includes a tax allocation clause in the Terms and Conditions which addresses withholding taxes,” the management response stated.
The ministry further explained that the agreement with Toppan Security Limited had been entered into under the authority of the Gambia Immigration Department (GID) and in accordance with the relevant investment laws administered by the Gambia Investment and Export Promotion Agency (GIEPA).
According to the ministry, the tax exemption provided under the agreement is recognised for tax purposes.
“The agreement was entered into under the authority of the GID in line with the Gambia Investment and Export Promotion Agency Act/relevant investment law, and as such, the exemption is binding on both parties and recognised for tax purposes,” the ministry stated.
To support its position, the ministry informed FPAC that it had submitted documents to the auditors, including the executed agreement between Toppan Security Limited and the Government of The Gambia through the Gambia Immigration Department, the company’s registration and Tax Identification Number (TIN) certificate, and correspondence between the Gambia Revenue Authority and the Gambia Immigration Department relating to the company’s tax exemption status.
The ministry also referred to a contractual provision governing tax deductions.
“If any competent authority in The Gambia requires that withholding tax (or a similar deduction) be applied to any payments, then the contract prices shall be increased such that Toppan Security Limited receives the same amount it would have received if such withholding or deduction were not required,” the management response stated.
It added that the contract addresses withholding tax through price adjustments rather than deductions at source.
“Therefore, based on the above contractual provision, the withholding tax requirement (if applicable) is addressed through price adjustments to ensure the supplier receives the equivalent net amount, rather than through deduction at source,” the ministry stated.
The ministry also responded to another audit finding relating to payments made to Margins ID Systems Ltd.
According to the management, the government entered into an agreement with the company after the contract with Simlex was terminated, creating an urgent need for materials required to produce national identity documents.
“In the case of the payment to Margins ID Systems Ltd., a desperate situation arose when the contract with Simlex was abruptly terminated, and there was an acute shortage of consumables for the printing of our national identity documents,” the ministry stated.
The ministry explained that the government subsequently approached Margins ID Systems Ltd. to supply the required consumables, resulting in the signing of a supply agreement.
However, unlike the agreement with Toppan Security Limited, the ministry acknowledged that the contract with Margins ID Systems Ltd. did not contain any clause exempting the company from withholding tax.
“There was, however, no provision in the agreement exempting the deduction of withholding tax,” the ministry admitted.
“The Ministry therefore takes note and would ensure deduction on the pending payments.”
During the committee’s consideration of the audit findings, the Chairperson of FPAC, Hon. Alhagie S. Darboe, asked officials from the Ministry of Interior to indicate when the outstanding withholding tax would be recovered.
The ministry, however, did not provide a specific timeline. Officials told the committee that the recovery process would depend on the availability of cash allocations.
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