Judge Mozart Chesson of the Tax Court at the Temple of Justice yesterday clarified that the decision to compel Lonestar Communication Corporation (LCC) to settle US$2,375,098 as tax obligation to government now rests with the Liberia Revenue Authority (LRA).
Although Judge Chesson was the one that the Supreme Court mandated to enforce its judgment compelling LCC to settle its tax obligations with the government, he claimed that his court was left out of the collection exercise.
“There is not a single document to show in our records that shows money has been paid. Maybe the parties have been negotiating on the terms of payment,” Judge Chesson said, when he briefly spoke with a group of journalists in his chambers.
“I think the government does not want to collect the money from LCC,” Judge Chesson said. “I can’t enforce any judgment against LCC if the LRA’s lawyers do not come back to the court to give us an update on the payment.”
He added “I have never seen a situation like this, where a person is admitting to having evaded government taxes and the government is reluctant to ask the court to enforce the judgment.”
Asked whether there was court service charges, Judge Chesson replied in the affirmative.
“Maybe the government would collect the court’s service charges and place it into our accounts… the court’s fee is not for anyone, as it has been done in previous cases, it is for the government and it must be deposited into its coffers,” Judge Chesson explained.
The Supreme Court in September this year mandated Judge Chesson to take jurisdiction over the matter after upholding the Board of Tax Appeal’s (BOTA) initial judgment declaring LCC liable to the government in tax obligations in the amount of US$2,375,098.
The Tax Court named the areas in which LCC defaulted in its tax obligations as expatriates’ salaries in the amount of US$956,780.20 inclusive of withholding on non residency fees in the amount of US$889,682.38, plus interests of US$159,391.91 and US$370,238.21, totaling US$2,375,098.
The figures covered the taxable period of 2009 and 2011.
Based on the demand, Judge Chesson on September 26 read the mandate in court in the presence of lawyers for both LRA and LCC.
“Having read the mandate, the court will now resume jurisdiction over the subject matter and herewith order the clerk to issue a Bill of Cost against LCC and place same in the hands of the Sheriff to be taxed by the parties within 24 hours.”
When LCC lead lawyer Cllr. Stephen Dunbar was asked via mobile phone whether they have made any payment, he replied in the negative.
“We accepted the Supreme Court’s judgment and are willing to settle our obligations, but the LRA’s legal team has never contacted us on the issue, so you can blame us for not honoring the court judgment,” Cllr. Dunbar claimed.
“We owe them and it is they who should come to us for payment and not for us to keep running behind them. If they refuse doing so, what else do you want us to do? Nobody can hold us responsible for non compliance,” Dunbar said.
Meanwhile, when the public affairs section of the LRA was contacted they informed this newspaper that their lead counsel was not in the country and promised that they would contact their legal department to respond.
Up to press time, nothing was heard from the public affairs and legal departments.
The case began in November 2012 after MOF conducted an audit of Lonestar’s tax return, indicating it must pay US$749,853.42, of which 53 percent of that amount was for turnover taxes, 5 percent in Goods and Services (GST) taxes and the bulk of the difference for penalty and interest.
The management of LCC fully cooperated and accepted the report, and requested a 60 percent waiver of the interest and penalty be granted.
On November 26, 2012, LCC paid into government’s revenue the amount of US$597,988.38, benefiting from a waiver of US$75,932.52 in penalties and US$75,932.52 in interest.
After paying the amount, the Ministry of Finance (MOF) cleared the company for the taxable period from 2009 to 2011 in accordance with the Revenue Code of Liberia.
However, between November 11 and November 30, 2013, MOF informed LCC that it was in possession of new evidence that raised the need for another assessment of its books and records for the same period.
They claimed that they had discovered through a forensic investigation documents showing dubious business accounting that had defrauded the government of a substantial amount, to the tune of US$19,197,903 .44.
LCC categorically denied any fraudulent activities and requested the opportunity to review the report of the alleged forensic investigation.
LCC further argued that because it had been cleared under the Revenue Code of Liberia Act of 2000, it would not allow the Ministry to make an additional assessment or an additional re-assessment of that taxable period.
Lonestar later reported the matter to the Board of Tax Appeal.
Unfortunately, that Board denied Lonestar’s complaint and reduced the amount from US$19,197,903 .44 to US$2,375,098, which caused the company to file a Motion for a Judicial Review of the two rulings.