Aims to enhance tax transparency, stop to banking secrecy, curtail tax evasion
Members of the House of Representatives of the 54th Legislature have passed their first Law since they resumed the legislative business of the Liberian people on Monday, January 15, and have forwarded the law to the Senate for concurrence.
The House has amended provision of the Business Corporation Act (BCA), Chapter 1 on Associations Law of Liberia, Title 5, Liberian Code Laws relating to Bearer Shares, which have to do with creating new Section 5.17 relating to the ‘Custodianization of Bearer Shares or Dividends.’
The amendment is aimed to identify and tackle the issuance and holding of bearer shares and the usage of nominee shares as a source of tax evasion, illicit flow of capital money laundering and terrorist financing.
According to the report from the Joint Committee on Judiciary and Commerce, the new law will support sustainable development by investing in infrastructure, health and other social goods; by enhancing tax transparency, put stop to banking secrecy and protect public finances by curtailing tax evasion.
Previously, the Liberian Business Corporation Act permits corporations to issue bearer shares and/or registered shares without any requirement to maintain a registry or to disclose the beneficial ownership information to identify those shareholders.
Now, with the amendment, the Act will reflect the discontinuance of bearer shares and full disclosure of the shares to companies and beneficial ownership information to an approved custodian.
“If the amendment had not been approved by members of the House of Representatives, it would have resulted into blacklisting of the Liberian corporate registry and a corresponding adverse impact on the Liberian shipping industry, which contributes significantly to the economy,” the report said.
The House approved the amendment following a report from the Joint Committee on Judiciary and Commerce.
Acarous Gray, Montserrado County District #8 Representative, made the motion for the second reading to constitute the third reading and to be be passed. Thirty one lawmakers voted for, while two abstained.