Monrovia – President Ellen Johnson Sirleaf has vetoed two proposed legislations sent to her by the National Legislature.
Report by Henry Karmo- [email protected]
They include an Act Granting Financial Autonomy to the Legislature, and Liberia Amendment Act of 2016 amending the Liberia Revenue Code of 2011.
Article 35 of the Liberian Constitution gives the President the Authority to approve or not approve a bill sent to her by the National Legislature.
In communicating to her action to the lawmakers, President Sirleaf said: “By virtue of the authority in me vested under article 35, I cannot approve this bill, and must therefore veto the bill in its entirety principally because of the reasons and concerns.
I look forward, however, to working with you on these issues with the hope that at an appropriate time we would be able to revisit the matter and drive an efficient, affective financial control system for the legislative branch of government.”
In her communication to the House of Representatives Monday on the Financial Autonomy Bill during a special session, she said the Legislature already enjoyed a certain degree of autonomy because funds are transferred periodically to the Legislature.
President Sirleaf also claimed that the Legislature had not enacted and endorsed any financial rule that would guide the management of funds and is yet to subject itself to an audit that would scrutinize the structure and performance of its financial management system.
“Given the volume of financial transactions being conducted even now, the Legislature still has not established an appropriate financial management control system to show financial and managerial accountability,” the President communication stated.
Two months ago, Bong County Senator Jewel Howard-Taylor proposed a bill that would give the Legislature Financial Autonomy in the management and processing of all documents relating to the administration of its budget, subject to compliance with allotment process from the Ministry of Finance and Development Planning.
The Act, if passed into law, according to the Bong County Senator, will be in compliance with all provisions of the Public Procurement and Concession (PPCC) Act of 2010 and with internationally accepted accounting principles and procedures as, well as the laws and procedures of the General Auditing Commission (GAC) of the Republic of Liberia relating to submission to audit within a statutory period.
Revenue code
Like the Financial Autonomy Bill, President Sirleaf also wrote the Legislature informing them of her decision to also veto the Liberia Tax Amendment Act of 2016, amending the Liberia Revenue code of 2011.
In her communication she said the bill as enacted by the Legislature would not have the real, desired fiscal impact, especially considering the current impact of the global economic downturn on the Liberia economy.
The President also in her communication said the Bill would also have an adverse impact given other measures government has taken including Liberia’s accession to the World Trade Organization (WTO) and status as signatory to the ECOWAS Common External Tariff (CET) and ECOWAS Trade Liberalization Scheme (ETLS).
“Mr. Presiding Officer, as you know, Article 35 of the constitution of Liberia gives the President the Authority to approve or not approve a bill that is laid before the President. By virtue of that authority in me vested, I cannot approve the bill in its current form and therefore must veto the bill,” she said.
The Liberian President resubmitted the Bill with several proposals, which she said presented disastrous consequences for the fiscal year 2016/2017 National Budget, among other reasons, because resources required for conducting elections, preparing for UNMIL drawdown, and undertaking critical social services would not be available.
Among several proposals, the Liberian leader said proposal to adjust goods and services tax from 7% to 10% would not only raise US$20 million for the national budget, but would also help to ensure that Liberian goods and services remained competitive within the context of the ETLS and WTO especially since every country in West African sub-region has a VAT rate of around 17%.
She also proposed that to increase the exercise tax rate on Tobacco from 50% to 80% is consistent with ECOWAS CET as well as what is obtaining in other jurisdictions relative to the health consequences of tobacco. This measure is estimated to add US$1.1 million to the current budget.
The proposal to increase the excise tax rate of alcoholic beverages from 35% to 45% is based on similar health concerns as well as what is obtaining in other jurisdictions. This measure is estimated to add US$3.3 million to the National Budget.
The proposal to institute a US$0.01 (one cent) per minute excise on telephone calls is intended to recapture some of the revenue being lost as a result of free calls. This excise will still make Liberia the cheapest mobile GSM location in the sub-region and would have raised US$5.7 million for government.
The President has instructed the Minister of Finance and Development Planning Boima Kamara to work with the relevant committees of the House of Representatives and the Senate to provide all necessary information that would lead to a passage of these proposed amendments.
With high unemployment, the government in a draft Liberia Tax Amendments Act of 2016, among many things, wants to raise taxes on goods and services. The government is pushing to raise taxes at 10 percent of the taxable amount on alcoholic products and additional 5 percent surtax applies to telecommunications services.
The amendment is also taking into consideration excise on tobacco: Amendments to section 1121, Tobacco and Tobacco Products. The amendment is proposing excise tax at the rate of 80% of the amount determined under subsection (a) shall be levied on tobacco and on any product containing tobacco, including cigarettes, cigars, snuff, chewing tobacco, and similar products, whether imported to or manufactured in Liberia.