The Banjul Breweries Ltd. has announced plans to shut down operations in The Gambia if the government does not respond to its letter over the controversial excise tax before Saturday, May 11.
The company has been at loggerheads with the government over the new policy which hikes excise tax from 10 to 75 percent. 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.
The Sales and Marketing Manager Borry Darboe described the new tax policy as discriminatory, alleging that the company was not engaged by the authorities before the policy came into force.
“I think this is a problem in The Gambia. People just come up with policies without any engagement or consultation.”
He warned that the national economy would suffer if Banjul Breweries shuts down.
“The wholesalers will close down and that means our beverages will not be available to the people. Even the tourism sector will be adversely affected,” he told The Chronicle.
“Banjul Breweries Ltd. is the only French investment in The Gambia and all other French investors who have interest in coming to the Gambia to invest will always use Banjul Breweries as an example.”
Darboe accused the authorities of ignoring the company’s letter requesting for dialogue to discuss the consequences of the new tax policy. He called on the government to reverse the decision.
“We are not telling them not to increase tax because we all know Gambia is dependent on tax. What we’re saying is that if they have to increase tax, they have to be reasonable to allow the company to grow and to be able to continue to provide tax.”
He suggested that 20-25 percent increment could have been acceptable, instead of 75.
“It’s like they are taking 90% of our business and we are left with only 10% because 75% plus VAT 15% is 90%. From 10% balance, the company pays its staff salaries and other overheads.”
Banjul Breweries Ltd. works with the Association of Wholesalers whose members are planning to meet President Adama Barrow to discuss a way out of the tax nightmare.
Osei Agyemang Badu, the Secretary General of the association and the CEO of Osabag Enterprise said when the new policy came into effect his company wasn’t hard hit immediately because of it coincided with the tourism season. He added that when the season was over his sales dropped drastically.
“If Banjul Breweries phases out, it’s going to be a disaster for the fact that the company’s workers alone will lose their jobs completely and then the distributors as a whole will lose their businesses. A lot of workers under them will also lose their jobs.”
Musa Muhammed Kebbeh, a local business owner said he and his 24 employees will be out of business unless the new tax policy is revised.
Banjul Breweries Ltd. has so far fired 18 casual staff, and has been planning to fire 25 more due to financial difficulties caused by the new policy.
In reaction to the company’s claim, 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,” he said.
In operation since the 1970s, Banjul Breweries Ltd. has maintained a reputation as the people’s brewer. It has been a big source of employment for Gambians, especially the unskilled youths. Among its flagship products is Julbrew.