LRA Boss Gives Reasons for Depreciation of Local Currency

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At a meeting with stakeholders and the media yesterday at the Liberia Revenue Authority (LRA), the Commissioner General of the Authority, Elfrieda Stewart-Tamba, blamed the depreciation of the Liberian dollar against the US dollar – which she said has affected the revenue generation of the country’s tax authority and impeded economic growth – on several factors.

Madam Tamba said the local currency is depreciating because of a deteriorating trade environment and a high demand for imports, which have increased the need for foreign exchange while at the same time increasing government’s expenditure in Liberian dollars.

However, Commissioner Tamba noted that the depreciation of the Liberian dollar is adversely affecting revenue performance “because of the trickle-down effect from trade.”

She said tax collection is enhanced when there is a boost in trade, “but as the case stands with the rate of the US dollar to that of the Liberian dollar, trade is negatively impacted and it is also affecting revenue collection.”

The Commissioner pointed out that income generation at some major income generating entities of the Government of Liberia (GoL), such as the National Port Authority (NPA) and other ports of entry, including the RIA, depreciated in the current fiscal year (2016/2017) by – 4 percent.

Presenting statistical data, she noted that the NPA generated US$27,145 from July 2015 to January 2016, which dropped to US$26,027 from July 2016 to January 2017, “which is equivalent to a minus 4 percent drop in domestic revenue.”

“Due to the depreciation of the Liberian dollar against the US, there has been a great decline in the purchasing power of Liberians and foreign nationals residing within our borders,” said the LRA boss, adding that false declaration and under-declaration by unscrupulous business entities and individuals have to some extent affected the revenue generation of the country as well.

Madam Tamba made specific mention of five ‘top’ hotels in the country that are among business entities that have ‘under-declared’ their intakes in business revenue.

She, however, failed to name any of the hotels on grounds that they will be disclosed at a later date.

Meanwhile, the country’s revenue collection head has disclosed that several vehicles were stolen from the United States of America (USA) by some Liberians residing there (USA), which were falsely declared here.

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