MONROVIA – Liberia is hemorrhaging hundreds of thousands of United States dollars in revenue due to rampant illegal entry of goods and commodities, alongside deliberate under-declaration and underpayment of taxes and surcharges at various borders across the country.
By Lennart Dodoo, [email protected]
FrontPageAfrica’s attention was recently drawn to trucks that crossed from neighboring Sierra Leone into Liberia with 81,000 cartoons of soap and other consignment. According to a source at Bo Waterside, that one just one of many trips that truck had made to Liberia with goods to be sold on Liberian market without going through the necessary compliance check with Customs.
The truck with license registration number RC-4235-U reportedly entered the country through the Bo Waterside border carrying 8,100 cartons of soap. According to a source assigned at the border, the declared Cost, Insurance, Freight (CIF) was US$3.3 per carton, resulting in a payment of only US$2,325, whereas they were supposed to pay US$37,000 as a surcharge before customs duty and GST.
The goods came in on February 3, 2024 and the name of the consignee is Trawally Enterprise which our source said does not exist. The soap, according to the source is now being distributed by A-Z Enterprise.
FrontPageAfrica gathered that there have been several goods including frozen foods, and flour that come through the Bo Waterside border and are often under-declared, thereby evading taxes and other fees. This, according to some local importers is creating an unfair business atmosphere as they, as legal importers, have to compete with unscrupulous business people who cut corners to have their goods on the Liberian market without paying the requisite taxes.
While FrontPageAfrica received reports that the recent goods from Bo Waterside were already on the local market, the Liberia Revenue Authority told FrontPageAfrica that “Customs authorities have impounded two trucks containing imported goods from Sierra Leone at the Bo Waterside border office in Grand Cape Mount County. The trucks were initially cleared by customs officers assigned at the border based on official instrument issued in March 2023. However, it was later realized that the instrument relied upon by the importer had been revoked by the LRA authority. The consignment is currently undergoing compliance review by customs to determine any additional duties and taxes in accordance with law.”
In a recent discussion with FrontPageAfrica, the newly appointed Managing Director of the National Port Authority, Mr. Sekou Dukuly, highlighted the unprecedentedly high cost of shipping containers to Liberia, posing a significant challenge for Liberians intending to relocate or engage in business endeavors.
Dukuly, drawing from personal experiences, empathized with the hurdles and complexities encountered at the NPA, reflecting on his own endeavors in shipping personal belongings, including his car and furniture. He emphasized the daunting task of clearing items from the port, underscoring the stress associated with the process.
The average expense for Liberians transporting containers from various international locations such as the United States and China ranges from US$2,000 to US$15,000. Analysts attribute these exorbitant costs to persistent obstacles hindering trade, with transportation expenses being a prominent factor.
While several African nations have adopted measures to mitigate tariffs and non-tariff barriers, thereby reducing shipping costs, Liberia lags in implementing such initiatives.
Dukuly stressed the importance of addressing underlying issues rather than solely focusing on the Freeport of Monrovia. He emphasized the need to identify efficient systems and eliminate redundancies, tasks assigned to his team to accomplish within the next 90 days.
In Liberia, each container is subject to import taxes imposed by the Ministry of Finance and the Liberia Revenue Authority. Import tax rates vary globally, with each country or region having distinct criteria.
Additionally, there exists a De minimis tax threshold, which determines when taxes or duties apply to imports. For instance, Australia applies a 10% tax on transactions exceeding 1000 AUD, while Liberia imposes a seven percent tax on importers.
Moreover, the landing cost encompasses various charges, including shipping, taxes, duties, fees, insurance, and the item’s cost. Import taxes may apply solely to the product or extend to shipping and additional fees.