The Gambia: Carbon-based taxation options

The Gambia requested technical assistance from the Fiscal Affairs Department regarding the implementation of a carbon-based excise. This is a summary of the technical assistance report and the recommendations provided to the authorities. The report includes suggestions on the design of carbon-based taxes building on the existing excises in the fuel price structure. It quantifies the economic impact on key macro-fiscal variables like fiscal revenue and economic growth. Additionally, it measures the distributional impact and provides an assessment of the readiness of social programs to be scaled up to shield the most vulnerable population. The report analyzes the supply chain of fuels, identifying potential efficiencies that could partially offset the impact on prices. Lastly, the report provides a legal strategy for the reform, including draft amendments to the Customs & Excise Act, 2010, to move ahead with the intended reform.