The manner in which business entities— both foreign and locally owned— are using tax incentives in the country, with the government paying 30 percent, has captured the interest of the House of Representatives.
The Lower House has mandated four committees to analyze and assess investment incentive agreements provided to businesses by the government through the National Investment Commission (NIC) and the Ministry of Finance and Development Planning.
The tax incentive is a deduction, exclusion or exemption from a tax liability that is offered as an enticement for businesses to engage in a specified activity for a certain period. Business entities earn up to 30 percent investment tax credit.
The acting chairman of the Joint Committee (4 committees), the chairman of the Committee of State Enterprise, Public Autonomous & Agencies, Rep. Garrison Yealue (Nimba District #4) told the House plenary that since their mandate, they have grouped businesses into four categories to conduct an in-depth assessment of their activities, but that seven (7) business entities are non-compliant – reluctant or somewhat lackadaisical.
According to a letter to House Speaker J. Emmanuel Nuquay last Tuesday, Rep. Yealue said the non-compliant entities are seriously hindering the committees from developing a comprehensive report.
He named the non-compliant companies as “Metalum-Liberia, TIBA Industrial Group, Liberia Coca-Cola Bottling Company, Monrovia Breweries Incorporated, Fouta Corporation, K&K Corporation and the Jetty Trading Corporation.”
“The committee humbly seeks the indulgence of plenary to reinforce its mandate. This will further strengthen and enable the committee to conclude its work effectively and efficiently,” he said.
A member of the Joint Committee, who begged for anonymity, told this newspaper that the investigation seeks to reveal the method by which these businesses have received the value of their respective tax credits and how they have used them.
The investigation dates from 2006 to present, a crucial period during which President Ellen Johnson Sirleaf wrote the Legislature for ratification of dozens of tax incentives for foreign and Liberian businesses.
The President argued that the purpose of tax incentive is to actualize government’s initiatives to attract and encourage investors to and in the country.
Another member of the House Joint Committee said companies who are not in compliance will be removed by the Legislature as provided by the Constitution.
After hours of debate among lawmakers, Chief Clerk Mildred Sayon was mandated to write the businesses concerned to comply with the Joint Committee’s request or be summoned to give reason why they should not be held in contempt.