Amin Kef Sesay: Sierra Leone Telegraph: 12 February 2021:
Indisputably, in any nation, the private sector is considered to be the engine of economic growth rather than the public sector, as it creates jobs as well as contributes towards internal mobilization of revenue through the payment of taxes which, in turn, forms part of the funds that Government uses to finance various development programmes.
It cannot therefore be overemphasized that the enabling environment must be created by any Government that is in power, in order to see the thriving of a buoyant private sector, including the business sector or community, that will in turn contribute immensely towards overall national development.
If on the other hand, there is a weak business sector that is choked by certain policies or laws, then this could be detrimental to the rapid attainment of economic prosperity, and consumers will bear the brunt of high prices of goods and services that are produced locally or imported.
This medium was recently intimated by aggrieved importers of various products to Sierra Leone that their businesses are being seriously affected by the inconsiderate imposition of taxes that are levied on them, contrary to what they have been used to paying before.
Importers of margarine / butter, especially, have raised serious concern over the new Excise Tax of 10% on the Cost, Insurance and Freight (CIF value) that they used to pay before clearing a container at the Queen Elizabeth 11 Quay in Freetown.
The embittered importers explained that the Finance Act of 2021 has imposed additional Excise tax of 10% on imports of margarine / butter which is consumed every day by households across all walks of life in the country.
They say that previously, importers were paying about 50% of CIF value as tax to the National Revenue Authority (NRA) for import of margarine / butter.
However, on the 1st of Feb 2021 the NRA commenced implementation of the Finance Act 2021 which imposes additional 10% Excise tax on import of margarine. Because of this, importers now have to pay about 65% of CIF value as tax to NRA instead of 50% paid earlier.
Based on information received by this medium, this new increase in tax will lead to sharp rise in consumer prices. Prior to May 2018, there was a 20% custom duty levied on import of margarine, taking the increased in tax to 30%.
Lamentably, it has now been increased by 65%. This is seen as a big blow, especially as businesses are struggling to cope with the impact of the coronavirus pandemic.
A Social commentator has averred that during these difficult times when cost of living is going up every day, Government should seriously consider reducing taxes on basic consumer items such as margarine.
“Margarine is consumed by ordinary citizens everyday – as bread and butter is considered to be the second most important staple food after rice. Why increase tax on staple food?” he asked rhetorically, noting that is inappropriate, especially as import duty had increased from 20% to 30% in May 2018.
Indeed, it is understandable that the Government is in dire need of revenue which could have influenced the National Revenue Authority (NRA) to increase custom duties. However, it must be remembered that the majority of Sierra Leoneans are struggling to make ends meet. Astronomical increase in consumer prices could deepen poverty.
The Government, especially the NRA, are now being asked to rethink their taxation policy so as to reduce prices in the shops and markets.