Monrovia – Telephones users in Liberia will have to brace themselves for increment in tariffs on calls as members of the House have voted to impose the one cent per minute additional tax on calls.
Report by Henry Karmo – [email protected]
The House of Representatives Tuesday voted in favor of the passage of the proposed tax amendment act of 2016.
The decision BY THE House of Representatives was based on a report from the Joint Committee on Ways, Means, Finance and Development Planning and Judiciary.
Part of the report voted on also called for taxes to be increased by from 7% to 10% on tobacco, 35% on imported water and 2% for locally produced water and that taxes on residential buildings are increased from 0.083% to 0.25%.
The lawmakers also voted that taxes be increased on land within city or town limits currently at 2% be increased to 3.5% and that goods and services taxes be increased from 10% and 5% to 15% on hotel services, gambling services and restaurant services including GST on alcoholic beverages.
“That proposed excise tax on alcoholic beverages was also increased from 35% to 45% for both locally produced and imported is unfair; and therefore alcoholic beverages imported should be placed at 45% while locally produced should be reduced to 25% in order to promote and protect local Liberian producer’s base on experts advice as it was done in the case of water.
“That plenary should consider the endorsement of all finings and observations contained in the report based on the current economic and market conditions which ignited these proposed amendments.
The committee is pleased to inform plenary that the mandate given her was diligently executed, therefore, the committee recommend that plenary approve these proposed amendments and adjustment made by the committee and forwarded same to the Liberian Senate for concurrence as it seeks to address the economic and market conditions of our country,” the report stated.
President Ellen Johnson Sirleaf October 2016 called back the Legislature from their legislative recess to pass laws increasing some taxes and introducing new ones.
The move, according to the executive, was necessary to address the anticipated shortfall in revenue to service the new budget.
The recent fifth and sixth International Monetary Fund Review Mission states that, despite the “Successful elimination of the Ebola Virus Disease, the [Liberian] economy is still not recovering.
GDP in 2016 is now projected to contract by 0.5 percent, mainly due to continued weakness of commodity exports, including lower-than-expected gold production, and the impact of the United Nations Mission to Liberia (UNMIL) withdrawal.
Inflation is also rising due mainly to the pace of depreciation of the Liberian dollar in the past months, and is expected to reach almost 9 percent on average this year.”
With the contraction of the Liberian economy and the rise in inflation, less jobs and increase in the cost of living, the government’s response to this problem is to increase the tax on the Liberian people.
Most sound economists would actually propose measures to stimulate economic growth such as reducing taxes, increasing investment incentives, and austerity in government spending.
The telecommunications sector is one of the sectors targeted for tax increases. According to a telecom insider, “the government wants to impose taxes on international calls and all calls made within the country.