In June 2025, the Minister of Finance and the Gambia Revenue Authority (GRA) announced the launch of a digital invoicing system, or e-invoicing. The development aims to boost domestic revenue and modernise its tax systems. This development is emerging as a powerful reform tool geared toward revenue mobilisation, transparency, accountability, and compliance. A practice adopted in other African countries, such as Kenya, Rwanda, and Ghana, digital invoicing enables the real-time tracking of value-added tax (VAT), revenue, enhances transparency, and reduces tax evasion.
However, while the benefits are clear, introducing a digital invoicing system also comes with real-world challenges, especially for small and informal businesses that form the backbone of The Gambia’s economy.
Therefore, this article aims to explain some of the benefits and the hurdles ahead. Let’s start.
Why Digital Invoicing Makes Sense
At its core, digital invoicing is a simple but impactful idea: businesses replace handwritten or printed invoices with electronic ones. These digital records are automatically stored and, in many cases, shared or accessed in real time with the tax authority.
Here’s why it matters:
- Real-Time VAT Tracking and Compliance
Today, many VAT-eligible sales are potentially unrecorded or underreported. With digital invoicing, every taxable transaction that is recorded is logged and visible to the Gambia Revenue Authority (GRA). This improves VAT collection, reduces errors, and enhances compliance.
Example: A supermarket issues a digital invoice for each customer purchase. The system automatically calculates VAT and stores the data, making it easier to report accurately.
- Less Room for Fraud and Manipulation
Paper invoices can be easily forged, lost, or edited. Well-developed digital invoicing creates a secure, traceable record that significantly reduces opportunities for fraud, such as inflated refund claims or ghost transactions.
- Simpler Recordkeeping for Businesses
Many businesses, especially small ones, struggle to keep organized records. Digital tools automate the process, helping them stay compliant while saving time and money.
- Support for Business Growth and Formalisation
Businesses that issue digital invoices establish a reliable financial history, which can help them secure loans, attract investment, or bid for contracts that require proof of compliance.
- Stronger Public Trust in the Tax System
A fairer and more transparent VAT system enhances public confidence in tax collection. People are more likely to comply when they believe others are doing the same and the process is honest.
But It’s Not That Simple
Despite the benefits, digital invoicing is not a silver bullet. If introduced without proper planning, it could overwhelm small businesses or widen the gap between formal and informal operators.
- Limited Internet and Electricity in Some Areas
Many businesses, especially those in rural areas, lack stable internet connections or access to electricity. If digital invoicing relies on constant connectivity, many small businesses may be left behind.
- Low Digital Literacy Among Operators
Many business owners are unfamiliar with digital tools, and as a result, they may be making large sales above the VAT threshold limit. Without proper training and support, adoption may be slow, and the risk of misuse or non-compliance could increase.
- Financial Burden for Small Enterprises
Digital systems may involve costs, such as buying a smartphone, paying for internet access, or subscribing to a service. For small or struggling businesses, these can be real obstacles. Even the large companies may need to start a new project to integrate this new tool into their existing system.
Data Privacy and Security Concerns
Centralizing sensitive transaction data brings information security risks. If proper data protection practices and cybersecurity safeguards aren’t in place, public trust could be damaged.
- Resistance to Change
Some businesses may resist adopting digital invoicing, especially those that are currently underreporting sales or evading taxes. Without the right incentives and gradual enforcement, compliance may be undermined.
- System Integration and Interoperability
For maximum benefit, the digital invoicing system must connect with other government platforms (e.g. tax filing, customs, procurement). Poor integration can lead to duplication, inefficiencies, and data mismatches. The system should be designed with open standards and modular architecture, allowing seamless integration with existing and future government systems.
A Balanced Way Forward
Digital invoicing can work, but the approach must be practical and inclusive. Here are some steps the government and stakeholders should consider:
- Pilot the system with large VAT-registered businesses before expanding to smaller enterprises. The implementation can start with large corporations, while SMEs can be given a two- to three-year grace period.
- The government could also consider phasing the implementation, starting with the West Coast Region and the Greater Banjul area. The learning from these areas could help expand to other regions.
- Ensure digital platforms are mobile-friendly and capable of functioning offline, particularly in areas with low connectivity.
- For maximum benefit, the digital invoicing system must connect with other government platforms (e.g. tax filing, customs, procurement). Poor integration can lead to duplication, inefficiencies, and data mismatches.
- Investing in national education campaigns and hands-on training, especially for small business owners and traders, can be done through collaboration with the business associations.
- Offer incentives for early adoption, such as faster VAT refunds or access to public procurement opportunities.
- Review and update laws and regulations to formally recognize digital invoices and protect data privacy.
- The government could also give a quarterly report on the number of companies enrolled in the digital system, with the value collected.
- The Gambia still relies heavily on cash transactions. Therefore, a partnership with the Central Bank to reduce cash deposit and withdrawal limits could boost more digital transactions. With more cash transactions, companies avoid recording transactions that the digital tax system might not track.
Final Thoughts
Digital invoicing is not just a technological upgrade; it’s a step toward a more transparent, accountable, and fair tax system. If introduced carefully and with proper support, it can benefit everyone: businesses, government, and the public.
Yes, there will be challenges. However, with proper planning, strong political will, and inclusive engagement with the private sector, The Gambia can establish digital invoicing as a foundation for improved tax compliance and long-term economic transformation.