Gov’t increases taxes

The Government of Liberia through the Ministry of Finance and Development Planning and the Liberia Revenue Authority has proffered a bill, seeking increment in GSM cellular phone voice calls, alcoholic beverages, tobacco products, and locally produced water.

Based on the bill, the joint House and Senate Committee on Ways, Means, Finance and Budget has held a public hearing. The making the case for government, officials of the two government entities emphasized the need for the increment on grounds that it will help government generate more revenue as the country experiences budgetary drought.

The public hearing which was conducted in the William Richard Tolbert Joint Chambers at the Capitol brought together key government officials, lawmakers and executives from the private sector. Acting Director General of the Liberia Revenue Authority, Madam Dekontee King Sackie said the little increment will give the government a boost in its revenue generation program.

But one of the GSM Cellular phone service provider, CELLCOM/Orange strongly differed with government, arguing that the increment will affect the revenue of his business entity. Mr. William Saamoi, Vice President for Government and Regulatory, said that the one cent increment will lead to terminating its three days air promotion being provided the public since 2012.

According to him, the one cent will also cause his company not to generate the needed taxes required by government because the purchase of recharge cards will drastically drop and it may put the CELLCOM/Orange in a difficult position for full operations.

For his part, Deputy Chief Executive Officer of LoneStar Cell/MTN Louis Roberts said that already, the Liberia Telecommunication Authority is indebted to LoneStar Cell/MTN of some huge amount. He wonders what becomes of the debt that government owes his company.

According to him, the company rejects the one cent increment, terming it as ‘not in the good interest of subscribers and LoneStar Cell/MTN. He said while it is true that LoneStar is not totally against the increment, but there are serious issues that should be taken into account before arriving at the decision.

Adding his voice to the debate, Monrovia Breweries through a concept paper rejected the increment of 45 cent on locally produced alcoholic products. The paper indicates that up to June 3, 2009, excise tax was five percent, later it was increased to 11 percent. By March 1, 2012, another excise tax rate increased to 35 percent. Section 1120 of the consolidated tax amendment act of 2011 increased excise tax rate from 11 to 35 percent.

After an appeal of overburdened taxes and levies the Minister of Finance at the time reduced excise tax rate to 20 percent by administrative regulations, and has been that way until now. The producer of Club Beer, Stout and Malta drinks stressed any attempt for the increment of 45 percent there will be reduction of workforce.

The paper narrated that Monrovia Breweries has lost over 35 percent of its market share to importers in the last eight years. Conversely, imported beer market shares has climbed over 600 percent from 2009 to 2016, if the trend continues, it will also lead to massive redundancy of workforce, and all of the consequences mentioned earlier, including low tax revenue generation by government.

By E. J. Nathaniel Daygbor-Editing by Jonathan Browne