President Ellen Johnson – Sirleaf has issued Executive Order No. 89, instituting policy measures to stimulate economic growth by reducing administrative and business process requirements on concessionaires, small, medium-sized businesses and manufacturers.
The Executive Order issued on Monday, 16 October in Monrovia says potential investors have curtailed or cancelled planned investments throughout the economy, adding that this period of protracted economic downturn and the period of transition combine to produce consequences which further excite expectations that the current situation will indefinitely persist.
The Presidency recognizes a protracted downturn that the Liberian economy has experienced in activities and slow growth driven by the continuous and persistent declines in the prices of and demand for Liberia’s primary exports.
The country’s primary exports include rubber, iron ore and timber. The Presidency notes the combination of events that has contributed to the low level of business activities currently experienced in the economic outputs of the industrial, commercial and retail sectors here.
The Executive Order adds that the prevailing economic and market conditions in Liberia highlight the need to develop tax policy and institute measures that incentivize and protect local industries.
It says firms in all segments of the Liberian economy, including importers and exporters, face regulatory, administrative, and tax mandates and demands which pose a burden heavier than would exist during periods of growth and expansion.
In the Executive Order, all Tax Penalties and Interest are waived, and principal amounts, which are due and have been subjected to assessments of Tax Penalties and Interest, remain outstanding, and are not waived by this Executive Order.
“Collections of Principal due are to be enforced taking into due consideration the causes of non-payment and the aim to secure the status of going concern of the businesses concerned,” the Executive Order says.
It says during this period of protracted economic downturn, these firms operating under these conditions also contend with a narrow local commercial loan market that causes them to seek loans and investments from cross-border capital markets.
But it finds that such conditions are postponing actions and decisions on Liberia-directed loans and investments as a consequence of the period of elections and political transition.
The policy notes that continued health of the Liberian economy depends on expansion of investments by companies to strengthen economic growth, expand jobs creation and stabilize incomes in parallel with investments in the public sector.
“Whereas, households, during this period of protracted economic downturn are burdened by difficult austerity measures, which disproportionately are affecting low income groups, and whereas, government revenues declined such that investments in public infrastructure and continued critical reforms of government institutions have slowed, jeopardizing important achievements,” the Executive Order says.
It says the adoption of the ECOWAS CET effectively limits Liberia’s ability to use import duty as a tax policy instrument to protect local industries from unfair competition and dumping.
In the exercise of the Executive Power vested in the President by the Constitution, the President, the Presidency issued the Executive Order instituting policy measures to stimulate economic growth by reducing administrative and business process requirements on concessionaires, small and medium-sized businesses, manufacturers, sole-proprietorships, and partnerships.”
It says Tax Clearances issued by the Liberia Revenue Authority (LRA) shall be valid for a period not less than six months, saying it is intended to reduce the administrative burden associated with the frequent processing of tax clearance.
Concerning Duty Free, it says any and concessionaires, registered businesses, and Non-governmental Organizations, which have been granted Duty Free status by virtue of the prerogatives of the Executive or by Acts of the National Legislature for all or some of their activity shall not be abridged and henceforth shall be strictly adhered to and enforced in accordance with governing agreements.–Executive Order