Development Planning, Samora P.Z. Wolokolie, highlights several areas of policy reforms including, addressing revenue losses with emphasis on reducing tax holidays from Concession Agreements, Executive Orders and Tax Credits and reviewing Section 16 of the Revenue Code of Liberia, among others.
According to him, revenue loss averaged more than US$100m annually, and as part of policy reforms anticipated under the 4-year Domestic Resource Mobilization Strategy, government intends to move from Goods and Service Tax (GST) to Value Added Tax (VAT) at 10 percent, simplifying the Revenue Code for wider understanding and citizens’ participation, conducting a comprehensive review of non-tax revenue by the Ministry of Finance and Development Planning to streamline the effective tax rate and burden on taxpayers, providing adequate support of the mandate of the LRA, as well as enacting appropriate legislation mandating receipt for every transaction involving exchange of value to curb corruption.
Making a presentation on Liberia’s Domestic Resource Mobilization Strategy for the period 2018 to 2022 at the Addis Tax Initiative Meeting recently in Paris, France, he said with respect to Tax Administration Reforms, the Strategy is looking at introducing electronic & mobile tax system to reduce compliance costs and increase efficiency, expanding access to LRA services through major infrastructure development, introducing excise stamp and increasing excise tax rate as well as strengthening LRA’s capacities in major areas of international tax audit, large tax enforcement and natural resources management, respectively.
According to a press release, the Initiative is a multi-stakeholder platform launched in the course of the 3rd Financing for Development Conference in Addis Ababa in 2015. It intends to generate substantially more resources for capacity building in the field of domestic revenue mobilization /taxation as well as more ownership and commitment for the establishment of transparent, fair and efficient tax systems.
Other reform proposals discussed by the Deputy Minister were in the Agriculture, Fisheries and Forestry, Mining and Financial Sectors such as focusing on market-led agriculture for food security with particular reference to rice production, high value horticulture and other cash crop, introduction of Agro-pole and incentivizing youth with training and start-up capital as “agri-preneurs”.
Wolokollie explained that government’s four-year Domestic Resource Mobilization Strategy will consider establishing Precious Mineral Marketing Corporation (PMMC) to add value such as polishing diamonds, develop precious metal sub-sector, facilitate marketing and withhold taxes from buyers and sellers and organizing artisanal miners into cooperatives for tax purpose.
Moreover, as part of the anticipated Reforms in the Financial Sector, he discussed the proposal to move away from a dual currency regime to the usage of Liberian Dollars only to reduce loss of sieniorage to the US Treasury and combat capital flight, averaging about US$ 1 billion yearly.
He continued that the Financial Sector Reforms will include introduction of various financial instruments, including Treasury Certificates and Diaspora Bonds as well the establishment of Liberia Stock Exchange, Venture Capital and Investment Trusts.
However he stressed that the Domestic Mobilization Reform Strategy which embodies the various reform proposals will firstly have to be approved by Cabinet before implementation. Press Release