In opposition, the current government of Julius Maada Bio bemoaned the frequent use of tax concession and exemption of the previous government of President Koroma which amounted to billions of Leones but in less than two year in office, the Finance Minister Jacob Jusu Saffa has reported a loss of 500 Billion Leones to tax reliefs.
In Sierra Leone, there are two types of tax exemptions-Statutory and Discretionary tax exemptions, the former is meant for those agencies that are protected under the Vienna Convention while the later are those exemptions which are given by discretion of the finance ministry.
Sierra Leone’s Finance Minister revealed to Parliament how over 500 Billion Leones have been lost as a result of tax exemption.
“Mr. Speaker, Honourable Members, every year, Government loses substantial revenues from tax and duty exemptions. For the first three quarters of 2019 alone, revenue lost to import GST and customs duty waivers amounted to more than Le 500 billion,” Jacob Jusu Saffa stated in his budget address to Parliament.
Surprisingly, in the SLPP Manifesto called the NEW DIRECTION, excessive tax reliefs and exemptions were few of the challenges President Bio promised to deal with.
“In 2015, government estimated to have lost Le837.4 billion (3.8% of GDP) from the 148 reliefs granted by fiscal authorities,” SLPP Manifesto stated.
According to ACTION AID, transparent tax system supports good governance and the accountability of policy-makers towards the public and that the granting of special tax incentives in opaque deals, at the discretion of individual ministers, without public scrutiny, undermines good governance and can increase the risk of corruption.
It could be recalled that in one of the executive orders of President Bio, he put a moratorium on all discretionary tax waivers but it is a surprised that the Minister of Finance unequivocally stated that they are dishing out 16% discretionary waivers to private individuals.
More details on this story in subsequent edition.