— Forwards to Senate for concurrence
In unanimous vote, the House of Representatives on Tuesday, October 1, 2019 finally voted to ratify the Fiscal Year 2019/2020 National Budget of US$526 million or its Liberian Dollars equivalent of L$110.46 billion. The decision was taken at the House’s 24th Special Day Sitting in Monrovia.
Members of the House of Representatives approved the Budget with a respective cut of 31% or US$2,586 from each member and 36% or US$3,600 for each Senator from net of monthly income tax for salaries and allowances and other reduction to include 50% cut in gasoline so as to address the compensation gap.
Judges of the Supreme Court will experience 16% reduction in salaries and benefits, while there will be 6% reduction in salaries of all employees of the Judiciary as well as State Owned Enterprises (SOEs), and proceeds realized shall be deposited in the Consolidated Accounts for subsequent appropriations by the Legislature.
Considering the salary cuts across the branches of government, the SOEs and the appropriation of the proceeds, the House of Representatives passed the National Remuneration Standardization Act of 2019.
The Act aims to ensure that salaries, allowances and benefits across government are uniformed and equitable for work done.
According to the House Joint Budget Committee, the revenue envelope of the US$526 million budget include: tax revenue (US$377.9 million); non-tax revenue (US$87.2 million) and external resources (projected as US$60.8 million).
The Committee, in its report, scrubbed the contingent revenue of US$7 million to minimize budgetary risks or shortfall, and also an amount of US$10.4 million identified as additional revenue accounting for Road Fund arrears and contributions from SOEs and to be reserved as a “buffer” pursuant to standard for enrollment in the International Monetary Fund (IMF) program.
“… Considering that there is a need to improve and support the proper collection of government revenues, the Committee wishes to inform you that these revenue projections are contingent on a number of factors including measures to be taken by the Liberia Revenue Authority and the passage of some legislation,” the Committee said.
The summary by economic classification of the budget include compensation of employees, US$296,992,923; Use of goods and services, US$72,272,618; Subsidy, US$430,500; grants, US$57,528,644; social benefits, US$US$1,491,628; non financial assets, US$36,264,534; domestic liabilities, US$35,945,775; and foreign liabilities, US$25,073,388; totaling US$526,000,010.
It can be recalled that President George Weah, through the Ministry of Finance, submitted the 2019/2020 draft budget to the House of Representatives of US$532,906,966.
According to the summary of the budget expenditure, compensation of employees is US$296,992,913, which is significantly less than what was earmarked in the 2018/2019 Budget (US$322,672,329), which would suggest reduction in some public (civil) servants’ allowances and probably salaries.
The ‘Use of Goods and Services’ is US$72, 272618; Subsidy US$430,500; Grants US$57,528,644; Social Benefits US$1,491, 628; Non-Financial Assets US$43,171,500; Domestic Liabilities US$35,945,775 and Foreign Liabilities US$25,073,388.
The 2019/2020 budget has the highest domestic liabilities in recent years, and the total budget has dropped US$37 million, as compared to the 2018/2019 Budget. However, there were huge budget shortfalls, and with this little over U$53 million, there is heightened concern that this year’s budget could suffer a similar fate in the face of an economy in free fall.