Liberia Losing Gold, Diamond Revenue To Sierra Leone & Guinea
Monrovia – Liberia is said to be losing a huge quantity of gold and diamond daily to Guinea and Sierra Leone due to the high export tax placed on these minerals.
Report by Edwin G. Genoway, Jr., [email protected]
Dealers in the mining industry are reportedly smuggling these minerals to neighboring Guinea and Sierra Leone to avoid paying government high tariff of 5% imposed on the minerals.
The 5% tariff on the export and sale of minerals, especially gold and diamond is said to be crippling the sector. The two neighboring countries have a lower tariff on the products, which is 2% for Sierra Leone and 1% in Guinea.
Fara Kamara, Acting President of Liberia Gold and Diamond Broker Association, admitted that the smuggling of the minerals by individuals is to dodge the 5% tax.
“The high percentage of tax on gold and diamond by our Liberia authority is killing the sector, this is causing people to smuggle the ministerial to our neighboring country that has less tariff on the product to sell,” he complained.
Liberia currently has on gold and diamond, a 3% for royalty and 2% for presumptive tax respectively totaling to 5% tariff on the minerals, while Guinea and Sierra Leone impose less than 5%.
“The reduction by 2% on the diamond by Sierra Leone and 1% by Guinea is killing the Liberian gold and diamond industry seriously, Liberia losing diamond for this,” he said.
While he welcomed the President’s mandate to the LRA to cut tariff on basic commodities, he also called on the LRA to reduce tax on gold and diamond.
“We welcome the president’s pronouncement to reduce the tariff on goods but we are also urging that the Liberian leader and the LRA see reason to reduce the tariff on minerals especially gold and diamond,” he said.
When the government reduces the tariff people in the gold and diamond industry will make the sector attractive and this will prevent minerals from leaving the country, he said.
He, however, frowned on those in the habit of smuggling the products to Guinea and Sierra Leone to desist as officials of the Gold and Diamond Broker Association engage government constructively to reduce the tariff.
Sanctions were placed on diamond export sanctions were imposed on the government of Liberia by the United Nations from March 2001 to June 2007. During that period, the country was prohibited from mining, transiting and exporting diamonds.
Kimberley Process Certification Scheme (KPCS) is an international system set up to authenticate that the source of diamonds is conflict-free zones.
Liberia started trading diamonds as of August 2007 by following the Kimberley compliance, through the support of the UNDP.
The launch of the Diamonds for Development Programme, a multi-sectoral initiative, was set up to promote the sale of diamonds to contribute to poverty reduction and the country’s post-war reconstruction and development.
Representative Vicent Willie, the House Chairman on Lands, Mines, Energy, Resources and Environment, said it is important that the government pays keen attention to the concerns of the brokers
“Once people are accused of smuggling diamonds to other countries it means the Kimberly system is either not effective or is being overlooked,” the Grand Bassa County lawmaker, who recently held a meeting with Liberian diamond brokers association, told FPA in a telephone interview Monday evening.
“I know there is a process for selling gold; but they (brokers) are into the market and so they know the problems; therefore, when they flag the issue, we have to look into it.”
Representative Wille added that he cannot say “uprightly that government must reduce the tariff”, but stressed that some of the brokers’ issues are valid.
He promised to use his committee to invite the Minister of Lands, Mines and Energy to look into the claims.
He added that cutting tax on gold and diamonds is the responsibility of the Executive.
Meanwhile, to curb some illegal activities dogging the sector, the president of brokers said the association has launched its identification card drive to ensure all brokers are identified.
“They need to take advantage of the process because we want all our members to be identified by their clients and other business partners here, the process is free of charge, you only need to come to Monrovia and continue your process,” he said.