The Ministry of Interior will recover D5.7 million in withholding tax, following an audit query. The Ministry stated that the recovery process for the funds would depend on the availability of cash allocations.
Regarding a payment to Margins ID Systems Ltd. The Ministry of Interior noted that "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 also clarified that "there was, however, no provision in the agreement exempting the deduction of withholding tax," and that "the Ministry therefore takes note and would ensure deduction on the pending payments." Separately, the Ministry of Interior explained that an earlier 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." It added, "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."
Audit Findings Detailed
The National Audit Office (NAO) reported that the Ministry of Interior failed to deduct withholding tax totaling D5.7 million from payments made under specific contracts. This omission meant the withholding tax was not deducted in accordance with the country’s income tax and Value Added Tax (VAT) requirements. Regarding the payment to Margins ID Systems Ltd. The Ministry of Interior explained that "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 acknowledged that "there was, however, no provision in the agreement exempting the deduction of withholding tax," and stated it "therefore takes note and would ensure deduction on the pending payments."
The ministry clarified that a tax exemption provided under the Toppan Security Limited agreement is recognized 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 of Interior stated. It further explained that "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."
Ministry's Explanations and Responses
The Ministry of Interior acknowledged the audit query regarding 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 from Toppan Security Limited because the company’s contract contained a tax allocation clause. It submitted documents to the auditors, including the executed agreement, company registration, TIN certificate, and correspondence regarding tax exemption. The Ministry stated, "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 further clarified its approach to tax requirements for Toppan Security Limited. "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 of Interior explained. The agreement with Toppan Security Limited was entered into under the authority of the Gambia Immigration Department (GID) and in accordance with investment laws administered by the Gambia Investment and Export Promotion Agency (GIEPA).
Regarding Margins ID Systems Ltd. The Ministry addressed the context of the payment. "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 of Interior stated. The contract with Margins ID Systems Ltd. Did not contain a clause exempting the company from withholding tax. "There was, however, no provision in the agreement exempting the deduction of withholding tax," the Ministry acknowledged, adding, "The Ministry therefore takes note and would ensure deduction on the pending payments." The auditors emphasized, "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."
Recovery Process and Next Steps
The recovery of D5.7 million in withholding tax stems from an audit query detailed in the government’s 2025 audited accounts. The Ministry of Interior is expected to address this finding, ensuring compliance with tax regulations.
Separately, the Ministry responded to another audit finding concerning payments made to Margins ID Systems Ltd. The Ministry had previously acknowledged that the agreement with Margins ID Systems Ltd. Lacked a provision for exempting withholding tax, stating it would ensure deductions on pending payments to the company. The auditors had emphasized that the Ministry should recover the amount in line with Income and VAT tax requirements and provide recovery details for confirmation.
