18 Staff Gone, 25 More to Go: Banjul Breweries’ New Tax Nightmare Continues
Banjul Breweries Ltd. has always been one of the Gambia’s business jewels since the 1970s. Popularly known locally as Julbrew (arguably its most famous beer), the company consistently maintained a reputation as the people’s brewer. It has been a big source of employment for Gambians, especially the unskilled youths.
Today, those reputations as well as the future of the company hang in the balance. Banjul Breweries is threatening to scale down or stop operations over the government’s new policy which hikes excise tax from 10 to 75 percent. It has cried foul and accused the government of not responding to its multiple letters raising concern that the tax hike would kill the company.
“We were informed by the Ministry of Finance that this increment is advised by IMF but sadly when Banjul Breweries Company met with IMF officials, we were duly informed that their advice to government is to make increment gradually, not as it has been executed by the ministry,” an official of the company told journalists.
The company has so far terminated the services of 18 casual staff as financial challenges posed by the new excise tax already kicked in. Joseph Sambou, who has worked for the Banjul Breweries for four years, is one of the casualties. He is the breadwinner in his family, raising his five kids.
“My services were terminated by Julbrew without prior notice and that’s unfortunate and unwarranted. This is a company I dedicated my life to for four good years. All of a sudden, they told me I could no longer work there because the government decided to increase the tax.”
Sambou said his most immediate challenge is how to pay his kids’ school fees and continue to put food on the table.
Lamin Fofana, a production department staff at Banjul Breweries for many years has also been made redundant.
“I’m already bearing the brunt of joblessness. I can’t even take care of my basic needs. The situation is so grave that I now rely on my friends for help.”
He called on the government to open talks with the company to find an amicable solution to the tax problem.
“I think the government should help us to solve this issue before many more Gambians would lose their jobs. Life is very difficult for me and the other casualties,” he tells The Chronicle.
Fatoumata Jallow Njie, a human resource officer at the company has told The Chronicle that 25 more staff were lined up for redundancy. According to her, “Banjul Breweries has no choice but to adjust itself to the realities on the ground”, arguing that in order for the company to survive in the prevailing market environment hard decisions and measures would have to be taken, including the termination of services of staff.
“We have no choice but to terminate the services of some of our very hardworking staff in order for the company to survive. It is not wise but the company itself may finally close down if a compromise is not reached with the government,” she said.
Meanwhile, the Permanent Secretary at the Ministry of Finance and Economic Affairs, Mod Secka said the new tax measure was publicly announced during the Finance Minister’s budget speech in the parliament through a line of engagement. In an interview with The Standard newspaper, he called on Banjul Breweries to channel its grievances through the same process.
“The government has a responsibility to ensure its policies are predictable and consistent in the medium term, and in the near future.”
Secka warned that the government would not be pressured into taking or reversing any decisions.
“It would only be informed by realities and what is practical but not pressure by anybody,” he told The Standard.
According to official records, Banjul Breweries has made a tax payment of D132m for the whole of last year. But under the new tax system, it has already paid D97million just from January to April.
Banjul Breweries Ltd. which had at least 150 employees before the enforcement of the excise tax, argued that it was irrational for it pay 75% excise tax while its sister companies in other African countries pay less. In Senegal, excise tax stands at 50%, while Guinea Bissau, Sierra Leone, Benin and South Africa are under 30%, according to some official figures.