PATEL promises continuous engagement with government
After admitting that the high tariff in Liberia, especially on imported goods in the country, which is causing serious problem for the common people in the country, President George Manneh Weah has made initial strides in ensuring that local businesses get some relief.
Following a meeting with the leadership of the business rights advocacy group, Patriotic Entrepreneurs of Liberia (PATEL) last week, some of the President’s initial interventions included dropping all penalties on retail imports and waiving storage penalties, and the payment of dues and taxes in Liberian dollars.
Speaking at a press conference in Monrovia over the weekend, PATEL Chairman Dominic Nimely said the initial steps are noteworthy and are signs of better things to come from the President. “We want to thank President Weah for these initial steps. We are very grateful for his intervention,” he said.
“The President assured us that his office will do everything to ease the problem at the Free Port of Monrovia,” Nimely noted.
President Weah had initially indicated at his inauguration that it was important for the Liberian Business community to have a business-friendly atmosphere so that the financial problems and challenges being faced by Liberians can be overcome. The essence of the meeting with the President, which was held last Tuesday, was to acquaint him with prevailing challenges faced by the business community as the government had previously promised to create a conducive business climate for local entrepreneurs.
The PATEL chairman disclosed that the President has ordered that authorities allow custom duties be paid hundred percent in Liberian Dollars (LRD). But Nimley says the five-day deadline given importers to clear their goods from the Freeport of Monrovia remains a serious concern.
He however noted that what has been addressed by the President is just a piece of the iceberg of the massive problem that local entrepreneurs are faced with.
“We want to thank the President for listening to us during the meeting and coming out with this swift little intervention, but we are overwhelmed with problems that need thorough attention and we all know the President is a man who has a listening ear. He is a man not just of the people, but the common people,” Nimley said.
He called on President Weah ensure that Liberia adopt the General Agreement on Tariff and Trade (GATT) system at the Port, rather than the old Brussels Definition of Value (BDV), which has been abandoned by many countries.
According to Nimley, the negative aspect of the BDV is that it places tariff on original prices of commodities based on prices gathered from the internet rather than from receipts and invoices submitted by business people from the point of origin, he said.
The BDV is a system for the valuation of imports for the application of ad valorem duties, adopted in 1953 following attempts to establish a European customs union.
BDV embraces the notional concept of value: that is, goods should be valued at the price at which such goods would sell under specified conditions, irrespective of the actual selling price of the given transaction. For duty purposes, adherents to the convention assess duties upon the normal price of the goods. It calls for good to be delivered to buyer at the port or place of introduction into the country of importation; that the seller bears all costs, charges, and expenses incidental to the sale and to the delivery of the goods at the sale and to the port or place of introduction.
GATT is a legal agreement between many countries meant to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas. It ensures substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis, according to Wikipedia.
It was first discussed during the United Nations Conference on Trade and Employment and was the outcome of the failure of negotiating governments to create the International Trade Organization (ITO). It officially came into force in 1995.
Nimley is baffled that the government through the Liberia Revenue Authority (LRA) is still using the BDV to clear goods, which is in contravention of the WTO that Liberia recently acceded to. “We should be operating under GATT since joining the WTO, but no one knows why we are not, when all of our members have transitioned to this modern instrument for many years.
“The Brussels Definition is still suited to Liberian officials because it is an instrument that breeds corruption and our customs officials are using it to exploit us. This is why they don’t want to transition to the GATT,” he said.
PATEL Vice Chair, Mr. Kafuma Dorley, said it is ill-intentioned that Liberia is the only country in the sub-region that still uses BVD, noting that WTO member countries have moved to GATT, which requires that commercial invoices be used to bill importers instead of using internet to validate prices of goods.
Unfortunately, the BDV does not take into consideration sales discount, thus making it to always have problems. “It bills you as per the unit price of commodities on commercial website such as amazon ali-baba and others.”
“The customs officers waste goods on the ground to check them one by one before billing retail importers, disregarding receipts and invoices from point of origin.
“For example, it is like you bought a car probably US$1,500 and shipped at a cost of US$1,500, LRA would turn down company receipt and contact number and would bill the importer US$3,000 for custom duties and tax. How can you pay tariff that is more than the price of the car? These people are gradually killing is and these are the issues that we want our government to look into,” he said.
He also noted that Liberia is losing millions because of these high tariff charges.
“Many of the business people now prefer to send their goods through our neighbors who have lesser tariff charges than us. Can you imagine how our economy is bleeding?”
He claims that barrels sent to families are opened and checked one by one, and owners are compelled to pay US$300 to US$700 to clear each of them. “Mr. President, because of this, the economy is dying slowly because everybody is going to Guinea next door to go buy their goods,” he notes.
“This high tariff is killing us as local business people. Many of our brethren are now locked up in prisons because they are unable to meet their bank obligations. Many have already gone out of business,” he said.
“We want the President to look into this in order to give us some relief,” Dorley said.