Liberia: House Ratifies US$794.5 Million Budget, but with Caveats

The House of Representatives has ratified the 2023 draft budget of over US$794.5 million with the caveat that the collection of projected revenues is realized and contingent upon stringent fiscal measures.

The budget was approved on February 21  with an increment of 16.5 million from the previous amount of US$777.9 million submitted by the Ministry of Finance and Development Planning on behalf of President George Weah in December 2022.

A total number of 37 lawmakers voted for the passage of the 2023 budget, but Reps. Rustonlyn Suacoco Dennis and Yekeh Kolubah abstained on the grounds that the budget should have been given to them prior to the for their perusal.

The caveats inserted in the 2023 budget aim to rectify pointed-out flaws in past budgets; followed by several recommendations to promote fiscal discipline.

The House's Plenary agreed to the recommendations that the Liberia Revenue Authority (LRA) ensure the timely collection of all taxes, including SOE's contribution and arrears from the road funds, on a monthly basis, and that maritime remittance payments be consistent with the LISCR agreement. Provided that all contributions shall be remitted at most on a quarterly basis, the Bureau of State Enterprises (BSE) shall ensure that the financial reporting of all SOEs is presented fairly, taking into account the expenditures and revenues. The effective monitoring of SOEs shall be conducted on a monthly basis by BSE at the expense of the SOEs, at a cost of 0.025% of their gross income per year.

The LRA and the Ministry of Mines and Energy shall coordinate to ensure the efficiency of collections of mining related taxes, including mechanisms for withholding at source. The LRA shall have viewing rights of all internal revenue generating accounts of revenue generating entities, including all SOEs, and the budget appropriation of the LRA shall be paid immediately upon collection of revenue at the budgetary ratio of 5% of revenue collection until the budgetary ceiling is realized in accordance with the Act creating the Liberia Revenue Authority (LRA).

Other financial measures include all Social Development Funds, including the Land Rental Fees, shall be transferred directly to the affected counties' escrowed accounts; there shall be a revenue sharing of 50%-50% between the Central Government and the Counties (Cities, Townships, Burroughs) for all excess budgetary revenue collected from the Real Property Tax; and the Ministry of Labour shall retain 5% of revenue generating for the enhancement of digital tracking and service systems to cover the cost of providing those services in real time so as to enhance efficiency in their services, among others.

During the House's Ways, Means, and Finance Committee's rigorous budget debates, Ministries and Agencies were given the opportunity to defend their draft proposals, but during the public hearing, in cases where there were doubts and insufficient information, the Committee divided into sub-committees to ensure that the hearing intently looked at the programs in detail, so as to ensure value for money.

"Honorable Speaker, Deputy Speaker, and distinguished colleagues, in order to enhance revenue mobilization and ensure efficiency in our service sectors, the Committee recommends the passage of the Fiscal Year 2023 National Budget along with its Budget Working Papers, and the Fiscal Measures stated herein, in addition to the Budget Framework," the Committee said.

Meanwhile, the major revenue  sources of the 2023 Draft National Budget are taxes on income and profits (US$242,075,000); taxes on international trades, which amount to US$235,964,000; and external resources (US$110 million).