In their desperation to garner resources in order to fuel their priorities, the Sierra Leone People Party Government of President Julius Maada Bio has been accused of overtaxing the private sector.
This was made known by the leader of the National Grand Coalition in Parliament, Kandeh Kolleh Yumkella who is also an economist when contributing to the 2019 budget in the well of Parliament last week.
“We also hold the view that the private sector is over taxed in Sierra Leone. For example, in the Domestic Revenue Mobilisation (DRM) Finance Bill 2019 Para 40, the government’s proposed ‘Upward review of fees, licenses, rates, charges and levies imposed and collected by MDAs to reflect current economic trends’ is understandable seen from the perspective of revenue generation for the government in difficult economic conditions,” KKY states.
That the government’s tendency to see fees, licenses, rates, charges and levies imposed and collected by MDAs as sources of revenue has a distorting and devastating effect on the private sector.
“By seeking to maximize revenue through licenses, fees, etc. risks hampering the growth of the private sector, deterring investors, and in effect killing the goose that should lay the golden egg,” he said.
He maintained that a preferred and recommended alternative approach is to see most licenses and fees as having a broader function of providing necessary regulation, protecting consumers, avoiding public danger, etc. Fees, licenses, rates, charges and levies imposed and collected by MDAs should be integral to the government’s overall strategy to create an enabling environment for private sector-led growth in Sierra Leone.
He urged the government to take a longer-term view and limit increments to fees, licenses, rates, and levies imposed and collected by MDAs, and aim for domestic revenue to come from growth of the private sector and a larger number of businesses paying their taxes and associated license fees, etc.
“As the largest purchaser of goods and services in the economy, government procurement, when done in accordance with best practices and on the basis of merit, has the potential to strengthen the finances and capabilities domestic companies, especially when combined with local content policies and procedures and efforts to diversify the economy,” the NGC Leader highlighted
He however asserted that there is a risk that new procurement procedures may disadvantage small businesses and even some larger ones adding that, that government should introduce these measures fully in partnership with private sector representative bodies.