Bread and butter issues in Sierra Leone – citizens demand review of taxation policy

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.

8 Comments

  1. More than any other time, for small and medium size businesses, times like this pose a serious risk to their business model going under. Especially with this covid19 pandemic and not a single credible plan by this government to rescue them in this strange times we are living in. Yet every sector we look at, is collapsing in front of our very eyes. The only thing that is working is Bio’s FAKE NEWS BRIGADE messaging telling us black is white, and White is black. Sierra Leoneans know the real story. When will this government start to address the real bread and butter issues that are in forefront of everyone’s mind. And given there is no clear end date pencilled that covid19 will end any time soon. Because we are long way off getting the vaccine. Make no mistake about that.

    Opening a department of small business funding, with easy to access soft loans and with well intentioned expert advice and offices in every province, will go a long way to address the disparities that exist right now. Some might say they already exist, but I don’t think they are working the way they should, or benefitting the intended targets. For example people promote the fantasy that there is road construction going on. In the real world nothing sort of that is happening – good roads that would aid small business by reducing the time goods take to reach the markets. We have to get away from dreaming about projects, or if they exist, put them in to practical use. With monitoring, transparency, and clearer achievable end goals.

    Despite all the noise we hear about the efforts that Bio and his government ministers are shouting about from the roof top, that they are engaged with small businesses, and they are doing everything to help them stay afloat, with tailored initiatives like giving them the right incentives and opportunities, as they try to hold on to their small businesses, it hasn’t filtered through. This government help is only helping the usual suspects – friends and relatives, and friends of friends. If you don’t know any one in government, you are hung to dry. “NO SABABU”. For some, there is that sinking feeling that, they might not be able to stay in business post covid19 pandemic. This is all because, like all things about this government, there is not a clear worked-out plan, or a road map to give small businesses a tax holiday until such time restrictions put in place by the government, due to the covid19 pandemic that is still in place is lifted and customers return.

  2. It is believe that the private sector plays a vital role in improving the economy of that particular country. That can only be achieved when there is a fair policies that will favor the private sector. How can the government increase tax by eleven percent for margarine when they fully aware that over eighty percent of Sierra Leoneans depend on it? It is high time the current government curtails taxation.

  3. When I was an engineering student, we visited a factory in Grafton producing margarine from palm oil. Why did the factory close and importers won? Same can be said for many of our manufacturing industries that created real jobs. There must be a tax advantage to manufacture locally and create real jobs. Job creation should be factored in taxation policy. This is vital for our security.

    • I support your statement one hundred percent. The government should take into account job creation instead of increasing taxes everyday.

    • I agree with you. The target to become less dependent on rice import should be the same for all staple foods. When I was in your country some years ago, butter was not so important for the ordinary people I lived among. But all the other things could be produced in own factories. The government should give interest-free loan for engaged interested Sierra Leoneans to start business with the aim of employing people.

  4. I would not say this – “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.”, but say – this “Indeed, it is understandable that the Government is BROKE and in dire need of revenue which could have influenced the National Revenue Authority (NRA) to increase custom duties”.

    Sierra Leone is now hell on earth under the Bio SLPP kakistocracy. Increasing taxes with all the hardship the people are going through is a dubious economic madness and insanity. Anyway, our people will be free from this economic and social nightmare after the 2023 election. Many lessons have been learnt from allowing a former SOJA become President. God bless Mr Amin Kef Sesay and may God help our people and country. Amen and Amen. Father God.

  5. Someone once said excuses are the tools of the incompetent – Totally agree. Since the criminal SLPP Cabal assumed the reins of power, the prices of the most basic commodities have ceaselessly been spiraling out of control. Days and nights have become eerily longer it seems and many with wide-open eyes are not afraid to boldly admit in public that rare delightful and memorable times, have now been totally transformed into moments of horror and complete despair. Folks in our little Sierra Leone, the only place I am proud to call my home, bread and butter issues have now become serious life and death issues under the watchful eye of the SLPP hoodlums in green.

    Excuses, excuses and excuses is all you will hear coming from them all day – no solutions on how to improve the lives of our struggling masses. What exactly is the point of increasing taxes on staple foods in a poor nation where people cannot afford three square meals a day? Goodness gracious, this is nothing but a truly disgraceful act that glaringly highlights their utter stupidity.(lol) But then again, what do you expect from neglectful, sloppy men who used to shine boots for extra rations of food until they reflected like spanking new mirrors?(lol) Raising a healthy family in Sierra Leone is no trivial matter any longer – it has become something that only the brave of heart would dare to try and accomplish.

    I have been told by friends, that the mean streets of Freetown are overcrowded with the homeless at night and swarming with wretched hungry beggars in the daytime – utterly disgraceful. This wicked President is tearing down structures that belong to honest hardworking women but strangely have become an accessory to a series of crimes; Yep, the man is guilty of aiding and abetting the rampant thefts of his ministers and gold-digging wife. (lol)

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