Weah Gives LRA 72Hrs to Reduce Tariffs

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President Weah wants LRA to reduce tariffs

In the wake of rising prices of basic goods and services, President George Weah yesterday gave a 72-hour (three days) directive to the Liberia Revenue Authority (LRA) to present a new schedule that will ensure immediate tariff reduction on a wide range of basic commodities imported, an Executive Mansion release has revealed.

Tariffs give a price advantage to locally-produced goods over similar goods which are imported, and they raise revenue for the government.

According to the release, the president has over the months observed that the current tariffs regime, including the Economic Community of West African States (ECOWAS) Common External Tariff (CET), is causing a serious hike in the cost of basic commodities, thus adversely affecting the Liberian people, especially the poor.

The president deems this as unacceptable and further expresses that it contravenes the promise of the “pro-poor agenda.”

The president said that he will leave no stone un-turned in making sure that basic goods are made affordable and that the public is not strangulated by unreasonable high tariffs.

“The current tariff regime, which was implemented during the final days of the past administration, has increased tariffs, in some cases as high as 40 percent,” the release said.

President Weah has therefore mandated LRA Commissioner General Madam Elfreda Stewart Tamba to report on his directive within 72 hours, beginning yesterday.

It may be recalled that shortly after President Weah was inaugurated in January this year, the president of the Paynesville Business Association (PBA) Sheik Y. Jalloh expressed the hope that the president will live up to his promise to address some of the challenges the business community faces, including waiver of fines.

Jalloh’s April 24 comment came against the backdrop of a series of concerns the business community raised, which included APM Terminals’ abrupt change in the number of days goods are to be kept in storage at the Freeport of Monrovia (from 21 days to five days), huge storage charges, high bills levied by custom officers, and the payment of taxes in United States dollars. President Weah held a meeting with authorities of the LRA to take immediate action by addressing sky-rocketing  prices of goods and services.

Mr. Jalloh said as part of efforts to address some of the challenges faced by Liberian importers, President Weah immediately instructed the LRA to waive all fines imposed on importers for failing to comply with set guidelines and regulations.

Additionally, Mr. Jalloh said President Weah also instructed the LRA to accept payment of taxes in Liberian dollars and reduce bureaucracy to allow importers to be prompt in clearing their goods.

The president’s directive yesterday came in the wake of the surge in oil price on the world market, which is hitting Liberians hard as the national oil refinery company calls on people to brace for the worst after increasing prices of petroleum products.

The increment comes at a time when the CDC-led government is propagating its pro-poor slogan, with the aim of making the interest of ordinary Liberians a priority.

But economists say since the price of petroleum products influences the price of several major commodities, the government must make timely interventions to avert acute inflation on the local market.

But government regulatory bodies of the sector are showing what appears to be a laissez-faire approach, stressing that the increment is based on global factors. As such, prices of basic goods and services, including transportation fare, have increased, thereby reawakening Liberians’ cry for government to ensure that the sky-rocketing of prices of commodities are contained or considerably reduced.

The government has increased the price by US$0.20: retail price of a gallon of gasoline is now US$3.61, while fuel is US$3.70.

However, the uncontrolled exchange rate between the US and the Liberian dollars is making the price unstable as some retailers are selling a gallon for L$500 in Monrovia, Paynesville, Brewerville and other cities near the capital. But in the counties and other rural parts the story is different, with some reporting that a gallon of gas is now being sold at L$600 to L$1000 respectively to the extent that locals are now bearing the brunt of a rise in the prices of other major commodities due to a hike in the transportation fare.

The new prices are creating more uncertainties for the local economy, while the exchange rate remains unstable despite the Central Bank’s insistence that it has fixed it.

Authors

12 COMMENTS

  1. We hope so it shouldn’t be like the other promises that were may after the election like they will bring in 6000 teachers from Nigeria to help us in the teaching field and up to now we haven’t seen non. and secondly the rate that was to be reduced is till climbing till it is the height of mount Kilimanjaro and with the several grounds breaking for Military hospital,hospital for the disable in Buchanan city,coastal high high way etc.
    And nothing have been done you are telling us with in 72 hrs which will be in three days and today is the second tomorrow will be the third day we will take you by your word.

    • Does the president knows what is costing the high Tariffs? Does he know that this is a world wide thing, or he just think that Liberia is producing everything, so the price should be low. The first thing that the president and his administration should do is to take a look at the price of gas, and what is costing the rising of various commodities in the country. Instead of using the word pro-poor slogan, he should go back to the drawing board. Let some of his advisor tell him the slogan that was used by President Tolbert-self sufficient-go back to the farm, produce your own food, instead of refusing to eat your native rice-or country rice. Let his friend in Nigeria that produce oil, sent him some oil to reduce the price of gas in the country-gas price is world wide. In the Washington DC area(USA) the price of gas is between 2.99 and up some area, the price is 3.99, so he needs to study the world market instead of giving” 72 hours mandated to LRA Commissioner General Madam Elfrieda Stewart Tamba to report on his directive within 72 hours to reduce Tariffs”.

  2. One wonders whether the Liberian Revenue Authority can resolve such a complex broad-based economic problem of inflation on its own. Why not set up a permanent or ad hoc technical committee consisting of competent individuals from both the private and public sectors to figure things out? The business community and relevant government agencies (Finance, Central Bank, Commerce, etc.) working together could come up with a durable and credible solution that works. We must avoid band aid solutions that produce unintended consequences and might compound the problem.

  3. That’s what the citizens need from you as a President of Liberia, the poor are many in the country, so you need to reduced good’s prices and bring the US rate down.The poor people trusted you and believed in you that you can delivered than from the suffering they are undergoing now.thanks……

  4. It makes no economic sense to levy high tariffs on products that are not locally made or produced, unless you want to increase government revenues on the backs of the citizens which seem contrary to the president’s “Pro-poor agenda”.

    Tariffs are good tools if they are well thought out and implemented wisely. It seems most of the commodities that are being tariffed are not produced in the country therefore are imported. Then what is the rationale to levy tariffs on those products? Who gets hurt in the end? The very poor Liberians the president is trying to protect are the ones that get affected because the higher cost gets passed unto them.

    Among the many things tariff does one is to encourage and protect domestic production. It should never be the objective of government to use this tool to increase revenue… in fact it would produce the opposite effect. Instead, government should focus on tariffs that would increase innovation and domestic production which subsequently lead to domestic employment. I am not sure about the 72 hours given LRA to come up with solution, but I think something needs to be done, unless LRA can come up with convincing reasons why the high tariffs are needed.

    However, I would encourage government to come up with policies that would create environment for Liberian entrepreneurship growth. This is something LRA should vigorously support, as this would give them reason for future tariffs if need be.

  5. President Weah needs to surround himself with seasoned micro and macro-economists, as well as surround himself with seasoned reputable individuals who have experience in international economics, international finance, and international trade. People of such calibers will help give the president sound economic advice before he makes emotional decisions that could plunge Liberia into an already deteriorating economic crisis.

    The economic situation in Liberia looks grim. The country is broke. It does not need to be poorly managed again! There has to be an economic balance between government revenue strategy (levying high tariffs, controlling inflation, avoiding deflation, raising taxes, ect.) and at the same time coming up with economic strategy in reducing high tariffs on imported goods.

    Liberia has for a long time operated in the “RED” in serious financial deficit. Liberia will not prosper with such high economic deficiency or imbalance when Liberia’s OUTPUT does not match its INPUT.

    An Output determines the quantity of goods or services produced in a given time period, either by a firm, industry or country. Without a massive output of goods and services, Liberia will always lag behind economically. These are some key areas President Weah and his “pro-poor” government needs to tackle first before cutting revenue/tariffs to please his foreign trader friends (Lebanese, Indians, and Nigerians etc) who already dominate Liberia’s import trade.

    Liberia has a serious problem when it comes to the macroeconomic side of the economy: Liberia’s economy is very weak! Liberia has a weak GDP: massive unemployment, low national income (except exorbitant salaries for few high government officials), weak price control, and the interrelations among the different sectors of the Liberia’s economy.

    These are some economic factors including corruption (ethical factor) and application of the rule of law (legal factor) that need to be addressed (with seasoned economic/legal council) that will help generate revenue and boost Liberia’s weak economy.

    First, strengthen the economy. This economic gain will be a motivator to the Liberia Revenue Authority to reduce tariffs or even cut taxes instead of a Presidential ultimatum to arbitrarily cut tariffs that could have an adverse effect on an already stressed economy. Sound Economic principle is a balancing act Mr. President if you want your “Pro-Poor” agenda to come into fruition.

  6. LRA head will be replaced, if insubordination hinders executive function of service to the Liberian nation. The past administration no longer exist. This new leadership has his plans as platformed to the people. Show the people the present executive revenue weight to improve the living standard. Executive orders intended to improve cannot be questioned with delay. Let the people act now.
    Gone in silence to registered majority. Do not reply this box.

  7. Hmm, lay way tin looking na seh, sommer all loosing hope oh becor lay way lay us rate almost teching lay sky and thing prices over wologizi mountain, I na think peace will continue in lay country for long. If lay us rate na drap thing prices will na drap and lay money seh just getting hard every day, sommer my scrapper neh and even responsible people cammie start arm rubbing and lay peace we enjoying everything cammie chaclaaa.

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