Wicked Liberian Legislature Passes Sweeping Tax Increase on Poor
“THIS COULD ONLY HAPPEN IN Liberia,” was the reaction of one Liberian to the recent series of tax increases imposed by the Liberian legislature on their poor constituents. According to a recent law passed by both Houses of the National Legislature entitled, “An Act to Amend the Liberia Revenue Code of 2011 and to Repeal the Economic Stimulus Tax Amendments Act of 2016 to Provide for the Economic Empowerment Tax Amendments At of 2016,“ the Legislature imposed tax increases on the General Sales Tax (GST), real estate, telecommunications, beverages (including water), and tobacco.
IN THE SAME LAW (Amendment to Section 1708 e), the Legislature shamelessly granted to themselves and members of the Supreme Court tax breaks that entitled them to import 2 cars each year duty free and all personal effects, which could include televisions, stereos, DVDs, furniture, air conditioners, and general household items.
THIS MEANS A SENATOR SERVING a 9-year term can import 18 vehicles into Liberia totally tax-free during his tenure! What is more disgusting is that such tax breaks were granted to people who get free telephone, scratch cards, gas coupons, and thousands of US dollars in salary and benefits out of the poor taxpayers’ money. Yes, poor Liberians are exorbitantly taxed to feed the leeches they elected to represent their interest under the perennial excuse of “budget shortfall.”
THE GST WAS INCREASED FROM 7% to 10%, a whopping 43% increase in one shot. This means that the price of goods and services consumed by the public will increase at a time when Liberia is facing very severe hardships and many Liberians are unemployed and others go hungry everyday.
THE NEW LAW ALSO INCREASED the tax on real property from 1/12th of 1 percent on the value of property to 1/4th of 1 percent, a three-fold increase. What is truly incredulous is that the Liberia Revenue Authority (LRA) has persistently complained that people are not paying their real estate tax, and yet they have increased the tax on real property? Has anyone heard of inducing tax compliance by increasing taxes? Well this is the demonstrable incompetence of those who claim to govern us.
THE TELECOMMUNICATIONS SECTOR seems to be the “fat cow” the Government continues to over tax. With a 15% GST on telecommunication services, the Government has gone further and imposed a 1 US cent surcharge on every minute of voice call, not every voice call, but every minute! By this measure, telecom companies can no longer offer free bonus calls because they would have to pay the Government for every minute of free call given to their subscribers.
THE LEGISLATORS WHO RECEIVE FREE scratch cards paid for by the Liberian taxpayers have now effectively banned tax payers from getting free calls, such as the “3-day free call promotion” offered by Cellcom. This proposal goes back to the letter written by Lonestar MTN Chairman and Presidential aspirant Benoni Urey who called on President Sirleaf to impose the surcharge on every minute of voice call. Urey’s suggestion was in direct response to the competitive nature of the telecom sector in which Lonestar MTN was losing subscribers due to aggressive marketing by competitor Cellcom.
THE GOVERNMENT HAS ALSO increased taxes on water, soft drinks, and alcoholic beverages. Despite the absence of a functional standards lab to check locally produced water and the poor sanitation practices of several local water producers, the Government has classified imported water as a luxury item worthy of an additional 35% surcharge tax.
PRESIDENT SIRLEAF SIGNED THE new law imposing all of these taxes in her last year in office, but our smart legislators, most of whom are up for re-election this year voted for it. It is clear that they are not only greedy, but not smart enough to foresee their own long term interest. Come 2017 elections, they will all be voted out for their greedy, selfish, and corrupt behavior and disregard for the suffering of the ordinary people.
ONE ASTUTE POLITICAL ADVISOR commented, “Liberians are to blame for the quality of their leaders because they make no demands on them, and allow them to get away with even murder. The preachers say nothing, the teachers say nothing, the lawyers say nothing, the workers say nothing, and everyone stays quiet. We have no sense of civic responsibility. This could never happen in other countries. Look at the Ivory Coast next door where civil servants have gone on strike over benefits. But give a Liberian man a chair to sit on the sidewalk and a beer to drink, and he is as timid as you can get.”
THE SAD DILEMMA OF OUR situation is that despite all the taxes paid by taxpayers, Government expenditure continues to go unabated, with officials getting high salaries, free gas, free scratch cards, constant international travels, and purchase of expensive SUVs. When will Liberians understand that “budget shortfall” is another word for “chopping money not enough.” Privilege and corruption, some of the root causes of conflict in Liberia, continue despite the lessons of our civil war.
BUT OUR SO-CALLED LEADERS should understand that we have yet to reconcile the nation, and that it was only a few years ago when we were killing each other. Can we allow the few greedy men and women in the Legislature to condemn us to another senseless round of violence, or will we take up our civic responsibility and kick them all out of Government once and for all?