House increases tax

The House of Representatives has passed the proposed Tax Amendment bill, increasing taxes on the 3-day ‘free calls’ scheme provided by GSM companies, alcoholic beverages, hotel, gambling and restaurant services, pending concurrence by the Liberian Senate.

At an extraordinary session of the 53rd Legislature Tuesday, some lawmakers argued that the US$0.01 (one U.S. cent) charged per minute on all calls was not in the interest of Liberians, which led them to vote with 32 for, 21 against and 5 abstaining from the process.
Lawmakers against the one cent increment on every call said, the intention of those favoring was to raise funds for the upcoming presidential and representative elections, and not to generate tax or revenue as claimed by the House Joint Committee in its report to plenary.
According to the Chairman on Ways, Means, and Finance, Prince K. Moye, the committee observed that the proposed amendment is in the interest of the state except that certain portions of the act were not “holistic and needed some corrections for plenary action.”
Rep. Moye said the Ministry of Finance and Development Planning (MFDP) and tax experts argued that the Government of Liberia is not collecting the expected revenues from the communication industry; and as such, the one U.S. cent should be charged per minute on every call.
Moye believes the government will generate US$12.5 million, if the Senate concurs with the House of Representatives, “which is a good direction for the government.”
He said during the hearings, Lone Star Cell MTN argued that the penny charged per minute on all calls will not affect the ongoing 3-day/US$1 promotion.
Rep. Moye said the joint committee through the chief clerk invited the MFDP, Liberia Revenue Authority (LRA), tax experts, Monrovia Breweries, all GSM companies operating in the country, stakeholders, civil society and other parties connected to the proposed tax amendment and conducted two separate hearings.
However, he resisted that an increase of excise tax on alcoholic beverages from 35 percent to 45 percent for both locally produced and imported ones are unfair, as it will be at the disadvantage of local producers.
On the question of water, Moye said, “The current rate stands at 10 percent and experts are recommending that it should be placed at 35 percent for imported, and 2 percent for locally produced.”
“The goods and services tax (GST) on hotel, gambling and restaurant services on alcoholic beverages is presently at 10 percent and 5 percent increment making it 15 percent on all,” according to MFDP, Liberia Revenue Authority and tax experts who attended the hearings.
In the committee report, Moye said it was established that the current rate of non-alcoholic beverages imported, excluding water is currently at 10 percent, and experts are proposing it should be placed at 35 percent.
He said the current rate of residential buildings, which stands at 0.083 percent, be placed at 0.25 percent due to the changing economic and market conditions the country is currently faced with.

By Bridgett Milton -Editing by Jonathan Browne