Monrovia – When a Joint Committee on Investment, Concessions, and Judiciary of the House of Representatives put a plan on the floor for the ratification of an investment incentive that would give the Farmington Hotel a 30-year tax break, many Liberians were in awe.
The proposal came an in inopportune time for many local businesses struggling to keep their heads above water.
The Liberian Revenue Authority (LRA) has been clamping down on the backs of many businesses, shutting down many said to be in arrears amid concerns that a few well-connected like Lebanese businessman George Abi Jaoudi are getting a free pass.
The lower House had earlier passed the bill granting 30 years tax incentive to the Farmington Hotels Resorts, Inc. And this week, it was the Senate’s turn to weigh in on the controversial issue.
5 Against, 1 Abstention; Several in Favor
In all, five senators – George Manneh Weah (CDC, Montserrado County), Nyonblee Karnga-Lawrence (Liberty Party, Grand Bassa), Geraldine Doe-Sheriff (UP, Montserrado County) and Jonathan Kaipay (Liberty Party, Grand Bassa) voted against the bill while several others present voted in favor.
Those voting in favor were: Senator Jewel Howard Taylor (CDC, Bong County) , Senator Dan Marias (NPP, Maryland County), Senator Milton Teahjay (UP, Sinoe County), Senator Oscar Cooper (UP, Margibi, County) Senator Sando Johnson (NPP, Bomi County), Senator Peter Coleman (CDC, Grand Kru County), Senator Matthew Jay (UP, Rivergee County) Senator Prince Johnson (IND, Nimba County), Senator Jim Tornillah (PUP, Margibi County), Senator Henry Yallah (PUP, Bong County), Senator Dallas Gueh (LTP, Rivercee County) Senator Francis Paye (NPP, Rivercess), Senator Gble-gbo Brown (IND, Maryland County) Senator Joseph Nagbe (NDPL, Sinoe County), Senator Conmany Wesseh (UP, Rivergee County), Senator Morris Saytuma (UP, Bomi County) abstained because he said he had not read the report and in fact, no Senator had actually read the report. Senator Albert Chie (IND, Grand Kru) who had been championing the bill was not in session during Tuesday’s voting.
Senator George Tingbeh (UP, Lofa Couty) voted against the bill but wanted to discuss further and introduced a new motion.
Senator Lawrence immediately put out a motion on the floor for the agreement to be thoroughly investigated, a move which was supported by Senator Weah. While his vice standard bearer Jewel Howard-Taylor supported another motion from Senator George Tengbeh (UP-Lofa County) calling for the agreement to be open for discussion and subsequently passed.
Thus, the controversial bill remains entangled in the upper House of the national legislature.
As critics pile pressure on lawmakers to do the right thing by voting against the bill, a lot of Senators appear to have already decided to go along with the lower house and make the 30-year tax break a reality for Mr. Abi Jaoudi.
Mr. Abi Jaoudi commands immense power and influence in the Sirleaf administration due to his close ties with the family, particularly her sister, Jennie Bernard.
The businessman, with the backing of the administration, obtained exclusive rights to import Nissan vehicles through his GBK Motors. At the height of Ebola, the government purchased most of the cars used during the crisis from GBK and continue to do so while other local car manufacturers struggle.
Quite recently, the Liberian National Police purchased thirteen Nissan Sedans drawing criticisms from some security experts that the funds should have been put toward the purchase of motorbikes or pickup trucks due to poor road conditions in the city.
Last year, in a clear breach of the Public Procurement & Concessions Commission regulations, Senators were loaned 30 vehicles from GBK motors and when they could not pay, they sought the intervention of the President to pay the vendors.
Besides his monopoly on Nissans, Mr. Abi Jaoudi also has a semi-monopoly on several other products including fish, meat, eggs and was also a major player in supplying crush rocks for the Mount Coffee Hydro plant.
Regarding the tax break for Farmington, some lawmakers are arguing that Abi Jaoudi has a solid case for tax break because he would be providing thousands of jobs, electricity to the airport and its environs, and modern public health conditions in accordance with generally accepted health and sanitation procedures and laws.
That argument was, however, shut down recently when Abi Jaoudi dismissed 40 of some 180 employees immediately after the just-ended ECOWAS conference in Monrovia. However, some Senators are shifting positions and unable to take a clear-cut stand.
In their own Words
In the aftermath of Tuesday’s voting, FrontPageAfrica spoke to several Senators in a bid to ascertain what was behind their thinking into voting the way they did.
Senator Geraldine Doe-Sheriff (CDC-Montserrado County)
I don’t think the incentives given to the resort are in the interest of the ordinary people who want to do business and I don’t see it necessary to give them all that incentive.
Senator Milton Teahjay (UP-Sinoe County)
It will be part of the general effort to stimulate the economy because we cannot sit and watch an institution of such go down the drain that will be a disaster for us.
Where I will have a problem is the duration and I think that is something we should look at but other than that I think giving tax incentives to businesses is what government needs to do to develop economically.
George Weah (CDC-Montserrado County)
If someone wants a 30-year tax cut you need to evaluate it. Is it necessary?
What about the other local Liberians who are doing businesses? If we will give it to the Farmington resort it should include the business people who go to China we need to sit and discuss what do we do for these people.
I believe that concession needs to be look at I know everybody wants a tax cut especially the business community if you give tax incentive it should be done across the board but the parliament is what it is the majority always win.
Senator Dan Morias (NPP-Maryland County)
We are not giving them 30 years tax break that you I can assure you.
Whatever we passed is subject to review they will not be written in stones every government has the right to review every concession agreements passed by previous Government. Concessions come with five-year review clause. We are not giving anybody 30 years we cannot do that.
Nyounblee Karnga Lawrence (LP-Grand Bassa County)
When you talk about incentive you tell people not to pay taxes because they have rendered some service to the Country. If you look at the exchange rate you can tell that our economy is in bad shape.
For me, the revenue envelope is getting smaller and smaller the security sector is complaining because they are not getting what they are requesting for so we need to do an analysis of our revenue generation before making these decisions.
Senator Oscar Cooper (UP-Margibi County)
They were supposed to submit their report I am waiting for the report to see what the benefits are for the people. It is a good thing to give incentive but how much. If it is 30 years it is ridiculous usually people give 5 years incentives with revision.
Incentives should be given to Liberian business first it has to be looked at and scrutinized. I was waiting for it to come if it is 30 years, I am not for it and if it is 5 years, given the reasoning and argument it is good.
Gble-gbo Brown (IND-Maryland County)
I have to see the report and recommendations if they are not justified then no. I wasn’t in session yesterday because of illness so I cannot say much.