The Gambia has looked to liberalize its economy and allow for foreign direct investments (FDI). But for a decade or so, the Gambia has been known to international watchdogs as a conduit for ill-gotten money. The just-released 2021 biennial Corporate Tax Haven Index, prepared by the non-profit Tax Justice Network (TJN), features The Gambia as one of the African countries with laws and position, in the global economy, posing a greater risk of corporate tax abuse by multinational corporations.
The TJN believes tax avoidance, tax evasion, and lenient tax policies constitute abuse because they worsen economic inequalities across the world. Taxation, especially an increment, is often derided by wealthy people and organizations. It is common to see the wealthy constantly fight to lower their taxes or move their monies offshore.
The Gambia is ranked 69 in a list of 70 countries in the world, and 7th out of seven African countries, by its Corporate Tax Haven Index value (CTHI). This is calculated by combining The Gambia’s Haven Score (50/100) and the Global Scale Weight. The Gambia’s Haven Score is a measure of how much scope for corporate tax abuse the country’s tax and financial systems allow and is assessed against 20 indicators.
A jurisdiction’s Global Scale Weight is a measure of how much financial activity from multinational corporations the jurisdiction hosts. Combining The Gambia’s Haven Score and Global Scale Weight gives a picture of how much of the world’s corporate financial activity is put at risk of corporate tax abuse by The Gambia. Other African countries in this category include Mauritius, South Africa, Liberia, Seychelles, Botswana, Ghana, Kenya and Tanzania.
The Corporate Tax Haven Index is a ranking of jurisdictions most complicit in helping multinational corporations underpay corporate income tax. The Corporate Tax Haven
Index thoroughly evaluates each jurisdiction’s tax and financial systems. This creates a clear picture of the world’s greatest enablers of global corporate tax abuse and highlights the laws and policies that policymakers can amend to reduce their jurisdiction’s enabling of corporate tax abuse.
The increasing internalization of finance means that money has the potential to move from one country to another in a bid to avoid queries and prying eyes. Financial technology as well as monetary policies that favour the wealthy continue to make this globetrotting possible for capital.
The Gambia under the microscope of financial crimes watchdogs
Tax havens also make it easy for criminals to launder money where they can send money from offshore accounts into the desired economy as if it is a foreign direct investment (FDI). In 2020, the global money laundering and terrorist financing watchdog, Financial Action Task Force (FATF) disclosed that The Gambia has not yet published a National Risk Assessment, though Banks and other financial services, as well as Designated Non-Financial Business and Professions in the country, have been identified to be the main sectors that are vulnerable to laundering the proceeds of crime.
Although the issue of organised crime is less prominent in the Gambia than in other nations in Africa, it nevertheless presents a serious issue for the country and its citizens. Organised crime in the Gambia is predominantly run by criminal networks that benefit from the aid of corrupt public officers.
The cocaine market is reported to have a severe impact on nearly all parts of society, as the Gambia is a significant transhipment point for the trafficking of the drug, with state officials working in collusion with organised-crime groups. The Gambia is also considered a source and destination country for forced labour and sex trafficking, with the networks that control the latter being international in their operations.
The Gambia is not listed by the US as a Country of Primary Concern in respect of ML & FC or listed by FATF, and the EU on their “Grey” lists.