The Ministry of Finance and Development Planning has revealed the revenue (resource) envelope indicating by what means (methods or manner) the Executive Branch of Government through the Liberia Revenue Authority (LRA) hopes to generate US$532,906,966.09 or its equivalent L$113, 248, 059, 364.28 to support the 2019/2020 Budget and avoid a shortfall. The conversion at a projected annual average exchange rate of $1.00 United States dollars is L$212. 51.
Deputy Finance Minister for Fiscal Affairs Samora Wolokolie told members of the Joint Committees on Ways, Means, Finance and Development Planning on Tuesday, July 28, 2019 during formal opening of the scrutiny of the revenue component 2019/2020 Budget that actual revenue to be mobilized domestically is an equivalent of US$472. 1million or 89% of the total resource envelope of which US$465. 1 million is core revenue and US$7.0 million is contingent revenue.
Mr. Wolokolie said US$60.8 million or 11% constitutes external resources of which multilateral grants is US$20.8 million and concessional loan which is also a contingent element of the envelope is US$40 million. He also indicated that 63% of domestic revenue is projected in United States dollars totaling US$297.4 million while 37% totaling LRD37.1 billion, equivalent to US$174.6 million.
“Given an actual output of US$442.8 million as our current revenue base with regards to domestic resource mobilization, coupled with a number of economic challenges both internally and externally, we have instituted a number of strategic revenue policy measures to be implemented which are expected to yield additional US$22.2 million in domestic resource mobilization. The measures are outlined in the detail assumptions,” Min. Wolokolie said.
He said from the key extractive sectors, which include forestry, agriculture, and mining, a total of US$60.7 million is expected.
The revenue forecast for the revenue industry is US$52.4 million and it includes Banking & Non – Banking Financial Services, Telecommunications, Hotel and Restaurant Services, Airline Ticketing and Reservation Services, Consultancy and Professional Services, Shipping and Stevedoring Services and Construction Services
The Deputy Finance Minister argued that from the general business sector, which is mainly driven by trade activities especially imports of consumables by large importers, retailers and wholesalers of Petroleum products, Fisheries, Supermarkets and stores, Pharmacies and drugstores, Building materials, and Motor vehicles sales and repairs, US$116.2 million is expected.
“Public corporations and SOEs are expected to contribute US$36.9 million in all taxes and fees. Keys contributors are NPA and the LPRC; CIVIL SERVICE contribution is expected to reach US$39 million on account of withholdings on salary and wages; Ministries and agencies which render services for fees under administrative fees are expected to contribute US$16.2 million in revenue; and the Small Medium Enterprises (SMEs) Sectors is expected to contribute US$121.8 million in revenue. They comprise the small taxpayers or small businesses, individuals who import goods from overseas, real, property owners, motor vehicle owners, etc.”
He added: “From a tax kind perspective, tax revenue is expected to yield United States dollars equivalent of 377.8 million from the following sources: Income and profit taxes – US$145.3 million.
Real Property taxes – US$5.3 million; Goods & Services including maritime – US$45.9 million; Trade Taxes – US$178 million and other Taxes (Social Development Fund) – US$3.1 million.”
Minister Wolokolie further said from the non – tax revenue category, a total of United States dollars equivalent of US$87.2 million is expected. This amount comes from the following sources as direct budget support from SOEs – US$12.7 million; Road Fund (including some arrears) – US$29.3 million; Royalties and Rents from forestry, agriculture, mining and license from mobile phone operators – US$27.8 million; and Administrative fees for services provided by sector ministries and agencies – US$16.2 million and Fines and Penalties – US$1.0 million.
Min. Wolokolie intoned that additional revenue policy measures which are expected to come into force during the Fiscal year will yield US$7.0 million and noted that this amount is however placed in contingency, and key among those measures are the full implementation of the new Excise Law, implementation of year 2 of the CET (Common External Tariff) Migration Plan, among others.
“External budget support (grants and loan) is US$60.8 million of which grant is US$20.8 million and loan is US$40.0 million; Grant from the European Union – US$5. 6 million; Grant from USAID under the FARA program – US$4.0 million; Grant from the French Government – US$5.0 million and the US$40 million loan is expected from the World Bank International Development Assistance Program,” Minister Wolokolie said.
The scrutiny of the revenue forecast is expected to last for nine days with the invite of over 40 revenue generating entities.