Monrovia – Tax evasion is not a crime that has been taken seriously in Liberia, but the Liberia Revenue Authority (LRA) is struggling to curb such financial malpractice that appears to be causing the government to lose millions of dollars in revenue generation.
The LRA has had its fair share of condemnations in recent weeks following the imposition of new taxes and regulations to curb tax evasion and at the same time raise revenue to meet up with the current fiscal budget.
Criticisms from importers over new regulations during the just ended festive season sparked protests, while the additional new US$0.01tariff on all voice calls has made the government unpopular with many Liberians and critics are asserting that the government wants to generate revenue at the detriment of already struggling masses.
To avoid the uproar from the protesting Liberian importers during the Christmas season; the government backtracked on its regulations.
In an exclusive interview with FrontPage Africa on Monday, February 13, LRA Commissioner General, Elfreda Stewart-Tamba, said the commission has reintroduced the system in order to prevent the understating of invoices by importers.
She said the work of the LRA is to transform the revenue collection system to transform and develop the country, adding that this requires a new approach to prevent tax evasion.
The LRA boss said some importers wrongly declare by presenting invoices that are understating the value of the items they import, which makes it difficult for the commission to determine the quantity of what is imported.
“So what we tried to introduce and we have now – we stepped back because of the holidays…, when you bring goods into the country you must declare the content – item by item,” Tamba said.
The new system is still being resisted by these Liberian importers as they claim the taxes are too high, but the LRA says it is working on sensitizing importers.
“All they have to do is to submit their invoices, their genuine invoices. That shouldn’t be a problem - but the record will show that in some cases they don’t have their invoices,” she said. "
"People are falsely declaring their income – major business, currently we are data mining…; you have major businesses in the country that just falsely declare their income.”
Raising revenue to meet up with current 2016/2017 fiscal budget seems impossible for the government especially as the prices of the country’s main exports have drastically dropped on the world’s market.
Exploring other areas of generating revenue has come with challenges especially as the public decry the US$0.01 tax on voice call.
Although the LRA and the Liberia Telecommunication Authority (LTA) have been condemned for the new tax regulations, Commissioner General Tamba says her commission doesn’t impose tax but there was an increasing need to put a break on the revenue decline by using the telecom sector.
“We had a problem whereby we see our GST declining and our corporate income tax declining - to address that problem we need to levy tax on the sector to mitigate the drop in the revenue,” she said, adding that there has been a drop in the revenue from US$20 million to US$6 million, while the voice call usage going up.”
The LRA boss said the commission will initiate series of audits of the GSM companies by July this year.
Reviewing Voice Call Tariff
“Given the outcry from citizens, we been looking at the design of the tax - and that process is ongoing,” the LRA Commissioner revealed.
But the revision of the new revenue law on voice call will obviously impact the budget after previous forecast showed that the sector could raise about US$8 million from the voice calls.
Asked if there are other means of generating revenue unlike imposing tariffs on voice calls, she said the LRA is looking to expanding its tax collection net to business entities that are evading taxes.
“Like these business people who import - when these goods come they clear through one person…; the tax authority do not know the other importers and these importers are subject to other taxes,” Tamba said.
Transforming and Modernizing LRA
Speaking earlier, Madam Tamba said the LRA is aiming to introduce an automation system otherwise known as electronic system ‘E-System,’ adding that significant inroads have been made and by June this year the system will be up and running.
The new system, according to Madam Tamba, will ensure filing and the payment of taxes electronically, adding that the electronic system while upgrade revenue collection to meet up with other African countries.
“In addition to our new system, we are also looking to strengthen our data center, we need reliable power and reliable wide local area network - so coming with E-System will strengthen wide and local area network,” she said.