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Sierra Leone News: Tax increase on foreign beer was a bad experience – Hon. Sheriff

The Chairman of the Committee on Finance, Hon. Hassan Sheriff, yesterday, disclosed in Parliament during the second reading of the Finance Bill 2017, that the tax increase on foreign beer, alcohol and spirits was a bad experience.
Presenting the Bill before Parliament for its second reading, the deputy Minister of Finance, Momoh Vandy, explained that the objectives of the Finance Bill 2017 is to continue to improve on tax and other domestic revenue collection, to ensure complete removal of technical and administrative difficulties in the implementation of tax legislation.
Strengthening and re-enforcing robust measures with the view to maximize tax invasion/avoidance by tax payers, ensure foreign workers are fully accounted for payment of taxes and work permits through the issuance of tax clearance certificate among others form part of its objectives.
According to Hon. Sheriff the intention of the Bill is to generate revenue for the government, which is badly needed. But, as MP’s, we should look at it critically in the interest of the programs it intends to cover as they cannot be over anxious in raising taxes to the detriment of the people they are representing.
He furthered the excise duties on alcohol beverages is very critical referencing the 2016 Finance Bill that made significant increase on the tax rate of beer, stout, spirit and the likes at $6.00 USD per litre, which he believes was a bad experience.
According to him the major importers of beer, Choitrams, which is the biggest importer of foreign beer, paid Le3.5 billion per month in taxes. Merani paid about Le1.5 billion per month. Before the Bill was passed in 2016, importers were paying about Le8 billion per month as taxes.
Since the Bill was passed into law in 2016, the government is losing huge somes of money. In 2017, Choitram and Merani did not import any beer according to reports before him and their tax payments are also zero, which implies more harm to the government, despite the intention of the Bill, which is to generate more revenue.
Hon. Sheriff disclosed that the increase in tax on imported beer, stout has led to the increase in smuggling of them into the country and the major importers recorded zero import but the products are for sale all over the country.
The intention of the increase in tax on imported drinks was to promote local industry including Brewery, which reports losses year-after-year. The government is losing taxes. They cannot continue to protect local industry and kill companies that are paying huge taxes to government on import duties on beer.
According to Hon. Manley Spaine, the National Revenue Authority (NRA) the technocrat body advised Finance Ministry on such increases but they refused to adhere, disclosing that the current figures are alarming.
According to Hon. Rado Yokie, the current Bill before them is inconsistent with the budget speech, explaining that increasing taxes on luxury vehicles will give rise to the importation of scrap vehicles, which they are against.
Hon. Ibrahim Ben Kargbo disclosed he did not want to believe Brewery is under the government local content policy, considering all the years it has operated.
According to the Speaker of Parliament, Hon. S. B. B. Dumbuya, his worry is why the Ministry of Finance refused to listen to the advice given by the National Revenue Authority.
By Alhaji M. Kamara
Wednesday April 26, 2017.

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