Liberian President Johnson-Sirleaf Admits Error in New Tax Law


Monrovia – President Ellen Johnson has admitted that an error in the new tax law is responsible for an increase in taxes, thus becoming a burden especially on small and medium enterprises.

Report by Al-Varney Rogers – [email protected]

Already, businesses in Liberia, especially the SMEs are feeling the pinch of the error in the law resulting to rising taxes.

The new law, according to President Sirleaf, is to conform to the Economic Community of West Africans States (ECOWAS) regulations on customs.

“There’s some problem there, we been talking.”

“First of all, when they were making the new tax law, we signed something that all the country in ECOWAS will have the same law. Liberia also has to join but we ask them to give us more time,” Sirleaf said.

On January 1, 2015 the new regional Common External Tariff (CET) became operational for all ECOWAS member states.

The Common External Tariff is one of the instruments of harmonizing ECOWAS Member States and strengthening its Common Market.

Article 3 of the ECOWAS Revised Treaty defines the aims of the community as promoting “cooperation and integration, leading to the establishment of an economic union in West Africa.

In order to achieve this, the community will ensure, in stages, among other means, the establishment of a common market through the adoption of a common external tariff and a common trade policy.”

The operationalization of the ECOWAS CET will be confronted with several, short-term challenges.

First, the negotiation of the Economic Partnership Agreement (EPA) between the European Union and West Africa; if a regional outcome is not found in the negotiations, a bilateral agreement could jeopardize the very existence of the TEC.

Also, the application of the ECOWAS CET has placed some members in violation of the WTO bound rates.

ECOWAS will now need to provide compensations to the WTO members negatively affected by the change of bound tariffs; the majority of west African countries have high bound tariffs (around 98 percent for some countries), whereas applied tariffs are on average much lower (less than 15 percent for some countries).

Heavily reliant on import taxes as a source of income, ECOWAS adopted a set of regulatory measures that include the import adjustment tax and the supplementary protection tax.

Apart from the CET, the Liberia Revenue Authority new regulations aimed at curbing false declaration have resulted in prolong delays and additional taxes for business people.

President Sirleaf said some business people do declare falsely which is responsible for additional taxes.

“When it comes to the port charges, yes. Again many people complain when they bring their things and say I bought this thing for so, so and so LRA go and do their own calculation on the computer, they look and say this person is not telling the true”.

“This thing worth more than that so sometimes they add some more taxes on it,” she added.

President Sirleaf said the government is finding a way to improve the condition at the port adding the government is doing all it can to reduce the burden business people faced.

“We try to do something the other day. When I made the talk to the house, remember I said we were going to free all containers all that one we doing just to reduce the burden on the people until we can study all these things and see how we can fix the taxes,” Sirleaf said.

In an exclusive Interview with FrontPage, LRA Commissioner General Elfreda Tamba said false declaration makes it difficult for the commission to determine the quantity of goods imported.

“So what we tried to introduce and we have now – we stepped back because of the holidays…, when you bring goods into the country you must declare the content – item by item,” Tamba said.

She said the new system is still being resisted by Liberian importers, claiming that taxes are way too high.

“All they have to do is to submit their invoices, their genuine invoices. That shouldn’t be a problem – but the record will show that in some cases, they don’t have their invoices,” she said. “

“People are falsely declaring their income – major business, currently we are data mining; you have major businesses in the country that just falsely declare their income.”

The Liberian leader agreed with business that the Revenue Authority regulation is resulting to high taxes thus posing serious burden on merchants.

“It’s true, that the LRA people are too hard, so we are working with the commissioner General Mrs. Tamba to see how she can look at some of these things to bring some of the taxes down,” Sirleaf said.

Recently the business community under an advocacy group called Patriotic Entrepreneurs of Liberia (PATEL) shut down Monrovia for three days in protest of high taxes imposed by the government.

The PATEL Executive Director Prince Howard said the protest at the grounds of the Capitol is to allow the Legislature addressed several issues ranging from the imposition of high tariffs on goods imported in Liberia, the constant inflations of the United States dollars rate, and the police constant harassment of petty traders.