Alan Luke: Sierra Leone Telegraph: 5 September 2020:
Why is the Ministry of Local Government holding up the tax reform proposals – and by implication local taxes which are due for the Freetown City Council (FCC), thus preventing the council from collecting the revenue it urgently needs to deliver basic services to its residents, when other municipalities across the country are not prevented from local tax collection?
On 7th July 2020, the Mayor of Freetown, Yvonne Aki-Sawyer issued a public notice confirming that FCC had received a letter from the Ministry of Local Government and Rural Development on 3rd July 2020, and that in the light of the letter, that the FCC would put on hold the implementation of the Property Rate Reform until the requested consultation with the Ministry have been concluded.
Yet, two months after requesting that the FCC puts on hold the Property Rate Reform, consultation has not started let alone concluded.
The new Property Rates has a significant and vocal minority who object to the changes proposed, despite the FCC’s efforts to explain to residents and businesses how the changes may affect through a comprehensive set of FAQs, which is available online.
To the question – Why do I have to pay a property tax / business rates? The FAQ gives the following response: “You need to pay the Property Tax/Business Licence to support the FCC’s Transform Freetown agenda and provide essential services. We worked hard to modernize our property tax system to make it as fair and equitable as possible. We are proud to say that we now have a system in which every property owner faces the same rules – from the valuation criteria employed to the consequences if you do not pay. Therefore, every property and business owner in the city will be expected to contribute your fair share.”
It goes on to state – “Note that it is a legal requirement to pay your property tax and/or business licence” in accordance with the Local Government Act 2004, Sections 56 and 69.
As Property Rates had already been issued and were due for collection before the FCC received the letter from the Ministry of Local Government, FCC is now in an unenviable position, facing severe financial constraints as a direct consequence of not being able to collect any revenue.
The Mayor’s office has confirmed that staff salaries have not been paid for three months, operational vehicles have been grounded, cemeteries are being overrun and the city’s remaining financial lifeline, i.e. funding received from DfID for street sweeping is due to end.
Given all the efforts made by the FCC under the leadership of Aki-Sawyerr, is this a situation that Freetonians and the government are prepared to countenance?
The ministry’s failure to enter consultation with the FCC and to conclude this quickly, raises further questions. Is the Minister or the Ministry of Local Government above the law and do they have any business prohibiting the implementation of the Property Rate reform, under the guise of a bogus consultation exercise, they appear not to be interested in conducting?
So, what does the Local Government Act 2004 say about consultations between the Ministry of Local Government and local government, regarding the setting of Property Rates and Business Licences?
Regarding Licences for Trade, etc., the main provisions are contained in Sections 56 and 57, and those for Property Rates are contained in Part 8, Sections 69 to 80. None of these provisions empower the Ministry of Local Government to unilaterally suspend or prohibit a municipality from raising local taxes. Section 71 makes it the responsibility of local authorities to appoint valuers and an assessment committee.
The Ministry of Local Government only has a duty under Section 76, who may after consulting the Ministry of Finance, issue guidelines for issuing and levying rates. Any such guidelines would be applicable to all local authorities and will not target the FCC only.
Evidence obtained from other municipalities suggest that residents elsewhere have faced significant rate increases which have not resulted in any intervention by the ministry. For example, a property in Koidu had a 105% increase in Annual Rateable Value from Le3,396.57 to £6,962.97 and Property Tax due of Le557,037.68.
Another property in Bo saw its Rateable Value increase from Le1277.30 to Le4790.3 and a Property Tax of Le399,000. Another in Makeni, saw its Rateable Value increase from Le151,200 to Le582,120 and issued with a Property Tax of Le69,854,400.
With these significant increases elsewhere, it begs the question, is the Ministry’s intervention in Freetown, politically motivated or not? If it is not politically motivated, why are all local authorities not subjected to the same action?
In view of the severe financial constraints the Ministry’s action is having on FCC, and given that the calls from Civil Society Leaders like Marcella Samba and Ibrahim Tommy, for the Ministry to end its unlawful suspension of FCC Property Rates and Business Licences, then it is now time for the Bio government to bring this to an end, and if not for the FCC to take legal action against the Ministry.
Alternatively, FCC should simply ignore the Ministry and collect its taxes in accordance with the law, so that it can continue to provide and deliver vital services to the people of Freetown.
For more on the Local Government Act 2004, see link below: