Tax Reforms in The Gambia’s 2025 National Budget

The Gambia’s 2025 national budget unveils transformative tax reforms to modernize the fiscal system, expand the tax base, and promote equity. These changes are effective from January 1, 2025.

This article provides summary points on the key changes.

Key Tax Reforms

1. Withholding Taxes
   • Expanded to cover contractors, suppliers, and consultants, with rates of 10% for non-resident contractors, 5% for public works, and 8% for others.
   • Impact: Enhances compliance, particularly in cross-border transactions, ensuring fair contributions.
2. Personal Income Tax
   • Tax-free threshold increased from D24,000 to D36,000 annually, reducing the burden on low-income earners.
   • Impact: Savings of D250/month for those earning D10,000, though government PAYE revenue may decrease.
3. Rental Income Tax
   • Formalized withholding rates: 15% for commercial properties and 8% for residential properties.
   • Impact: Captures previously uncollected revenue and formalizes the rental market.
4. Digital Economy Taxation
   • Non-resident digital service providers must register for tax, include taxes in invoices, and comply with local laws.
   • Impact: Targets major global corporations, ensuring contributions to the Gambian economy.
5. Air Ticket Sales
   • Introduced a 1% withholding tax on all air ticket purchases.
6. Corporate Income Tax Deductions
   • Deductions for companies investing in youth and sports development.
   • Impact: Encourages support for national development initiatives.
7. Excise and Duty Reforms
   • Export duty on scrap metal set at D5/kilo.
   • Exemptions for agricultural equipment used in poultry farming.
   • Tax exemptions on government vehicle imports (excluding agencies and enterprises).

Conclusion

These reforms address inefficiencies, expand the tax base, and introduce modern measures to enhance fiscal sustainability. By focusing on fairness and equity, The Gambia’s 2025 budget sets the stage for economic growth and modernization.

About the Author
Salifu is a chartered accountant and finance director with extensive financial planning, taxation, and corporate finance expertise. A member of ACCA, Salifu is the President of the Finance Leadership Forum and Co-founder of I-Grow Venture Ltd. You can read a more detailed explanation and examples of these reforms in a recent article he wrote about 2025 tax changes in the Gambia.