Liberia: Commerce Ministry Selectively Gives IPDs on Banned Products to ‘Special Clients’
Monrovia – It has now been shown that authorities at the Ministry of Commerce and Industry are secretly going back to doing what they had planned to undo.
In a communication dated February 18, 2019, the Ministry of Commerce, under the leadership of Professor Wilson Tarpeh, instructed the Managing Director of Bureau Veritas (BIVAC), Laurent Koenig, to stop any further processing of Import, Permit Declaration (IPD) documents of certain products.
Bureau Veritas Group is the exclusive pre-shipment inspection (PSI) provider for Liberia. Pre-shipment inspections are required for goods valued at US$3,500 and above.
The Commerce Ministry took this stance against some imported items in a bid to empower local businesses, by placing a ban on the importation of several goods, which the Ministry says can also be locally manufactured in Liberia.
On January 30th when he announced the Ministry’s decision, Minister Tarpeh said following an intensive investigation, the Ministry discovered an active and illegal practice in existence involving the illicit issuance and/or manipulation of Import Permit Declaration (IPDs) by local importers, which is seriously reducing GoL’s revenues and undermining the visibility of local manufacturing companies.
According to Minister Tarpeh, these illegal IPDs were resulting in the flooding of goods on the local market with low quality, thereby impacting flour, nails, eggs, biscuits and other essential commodities; goods with under declared value as well as smuggled flour, all of which deprived the government of legal revenue.
However, FrontPageAfrica has obtained a letter from the same Ministry addressed to the same individual at BIVAC.
In the March 19, 2019 letter under the signature of Mr. A. E. Nyema Wisner, Deputy Minister for Commerce and Trade Services, the Ministry writes Mr. Koenig informing him that even though it had earlier written and restricted BIVAC on which and what goods that should not or should be inspected, it was, however, relaxing the rule for some of those same goods, which are going to be imported by some of their “clients.”
“We present our compliments to you and wish to inform you again that base upon the previous letter restricting the importation of some listed items that are manufactured in Liberia; we ask that you please pass the following documents as said regulation doesn’t affect them.
“Thanks for your continuous effort in seeking clarity of all questionable documents from the Ministry.”
What is, however, sinister about this, according to a highly placed source within the Commerce Ministry is that this is NOT an open deal for every business person with the potential to importing those goods.
“Look my brother, this is a deal and it is only for a very selected group of business people. These people, most of whom are foreigners, secretly come and pay very good amount of money to the top guys in the [Commerce] Ministry just so that they can be the only ones bringing in those goods that are only banned in their mouths,” our Commerce Ministry source said, anonymously.
Critics of the Ministry’s Ban
Long before the news of the ban on those goods came to the public glare, one known critic of the Liberian Government, Mr. Henry Pedro Costa, was the lone voice bellowing how bad the ban is.
According to Mr. Costa, the prohibition isn’t good as it restricts consumers’ tastes to only particular brands of things and that the market would be closed one instead of it being opened.
He had even threatened to complain the Liberian Government to the World Trade Organization (WTO) telling that body that Liberia was in violation of some of its policies.
Though Costa, who wants a better Liberia for all Liberians, didn’t state specifically which portion of the WTO’s regulation had been violated, the Organization’s “Import Licensing” talks about member state, which is making changes to its import procedure “should notify the WTO when they introduce new import licensing procedures or change existing procedures.”
Amendment to Revenue Code
Just about the same time that the Ministry of Commerce was trying to effect its ban on certain imported goods, the 54th Legislature had made life-affecting measures to amend the revenue code of Liberia. This in effect would see drastic changes in prices of some of basic necessities ordinary Liberians rely on for their daily livelihood and relaxation.
The Revenue Code Phase One of the Reform Tax code of Liberia, AD2000, as amended by the Consolidated Tax Amendments Act of 2011, to Reform Excise Tax Law (2018) has three components.
For example, the Excise Tax which was previously 35% and now raised to 45 % in the new approved tariff, authorities are trying to make the tax US$1 per litter instead of the 45% approximately which is double in terms of value extremely high.
The second involves the Duty. In the Custom Ecowas Tax (CET), it was previously 25%. But in mid-April 2018, the figure was changed to 0.90 cent per litter. Authorities are now in the process of proposing a new proposed tariff. Goods and services taxes (GST) remained unchanged at 10 percent.
Excise tax is a levy on goods with health, environmental and social effect. The Liberia Revenue Code of 2000 established a legal basis as amended 2011, chapter 11. Excise taxes are calculated on the cost, insurance and freight of imported goods except for alcoholic beverages and tobacco product and ex-factory price for local manufactured goods. For alcoholic and non-alcoholic imported and locally manufactured beverages and tobacco products.
The changes will see taxpayers and consumers paying high fees on several beverages and products including fruits, water, wine, and alcohol.
According the revised revenue code fruit juices (including grape must), and vegetable juices, unfermented and not containing added spirit, whether or not containing added sugar or other sweetening matter which were previously two percent.
Under the amended act, commodities such as waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening water or flavored; ice and snow will see a 0.45 percent increase.
The amended revenue code is sending shivers amongst many Liberians with many unsure how the new changes will impact the lives of ordinary Liberians.