President Ellen Johnson Sirleaf has announced that a vigorous tax enforcement plan is being finalized by the government of Liberia (GOL), to be implemented by a Special Task Force.
In her Annual Message to the National Legislature on Capitol Hill on Monday, January 27, President Sirleaf said the Revenue Task Force would commence operations as the government moves to make the newly established Liberian Revenue Authority (LRA) operational at a much faster pace.
She, however, informed lawmakers that activities of the Task Force may cause discomfort and embarrassment for some public officials and prominent individuals and businesses that are yet to pay their fair share of taxes.
“I encourage each of us to check our records and move quickly into full compliance,” the President noted. “It is only by paying our fair share of taxes that we can boast of truly contributing to our national reconstruction and development.”
The new Revenue Task Force is expected to be set up by the Ministry of Finance, but critics believe that the establishment of said task force by the Ministry of Finance is a clever attempt to further delay the coming into force of the newly enacted Liberian Revenue Authority.
Some taxpayers and businesses, who spoke under condition of anonymity, expressed fears that the government (Task Force) could carry out arbitrary measures that contravene the law.
While the conversation was ongoing with taxpayers yesterday, some of the businesses observed that there must be a hidden agenda by the Ministry to set up such a task force; especially when the government already has structures in place responsible for tax collection. The LRA is expected to come into full swing on July 1, 2014.
At the same time, the Ministry of Finance has reported that the task force is necessary to help it go deeper into collecting government revenues. The LRA was enacted in 2013 separating it from the Ministry of Finance. Until the LRA can commence full operations, its functions are still being executed by the Department of Revenue of the Ministry of Finance.
Last week, the Ministry of Finance announced that it would embark on the rigorous task of collecting the GOL’s revenue.
Facing the House of Representatives’ inquest, Finance Minister Amara Mohammed Konneh declared that the government has experienced a revenue shortfall of US$17 million in the month of January alone.
President Sirleaf appeared to look at the problem more analytically in her annual message where she reported significant improvement in government’s fiscal budget since FY2006/07, allowing service provision and investment expansion.
She told the legislators that core revenue increased by an average of 29% each year, “and total revenues, including continent and on-budget borrowing, rose from US$148 million in FY2006/07 to US$559 million in FY2012/13.
The President, however, noted that continued sluggishness in core revenue, increasing by only 17% over the previous year, and an average 27% over the seven years, suggests more efforts are needed to strengthen the Ministry of Finance.
She stressed that the Ministry of Finance needs to take bolder steps, including proposed legislation to broaden the tax base.
“Even though good partnership relations through grant support and one-off payments from sign-on bonuses have covered revenue gaps over the past years, this practice is not sustainable and could become a disincentive to efficiency in tax collection and tax consciousness,” said the Liberian leader.