Indisputably, in any nation, the private sector is considered to be the engine for growth as opposed to the public sector as it creates jobs as well as contributes towards internal mobilization of revenue through the payment of taxes which, in turn, forms part of the funds that Government uses to finance various development programmes.
It cannot therefore be overemphasized that the enabling environment must be created by any Government that is in power in order to see the thriving of a buoyant private sector, including the business sector or community, that will in turn contribute immensely towards overall national development.
If on the other hand, there is a weak business sector that is choked by certain policies or laws then such will be inimical to the rapid attainment of development and consumers will have to bear the brunt reflective in high prices of goods and services that are produced locally or imported.
This medium was recently intimated, by aggrieved importers of various products, that their businesses have been seriously affected as a result of inconsiderate imposition of taxes that are levied on them contrary to what they have been used to paying before.
Importers of Margarine butter, especially, have raised a serious concern over the new Excise Tax of 10% on the Cost, Insurance and Freight (CIF value) that they used to pay before clearing a container at the Queen Elizabeth 11 Quay in Freetown.
The embittered importers explained that the Finance Act of 2021 has imposed additional Excise tax of 10% on importation of Margarine butter which is consumed every day by individuals from all walks of life in society.
According to them before this time, importers used to pay about 50% of CIF value as tax to the National Revenue Authority (NRA) on importation of Margarine butter.
However, on the 1st Feb 2021 the NRA commenced the implementation of the Finance Act 2021 which imposes additional 10% Excise on importation of Margarine.
Because of this, importers now have to pay about 65% of CIF value as tax to NRA instead of 50% paid earlier.
Based on what this medium learnt, this new increase in tax will definitely shoot up the price considerably as importers will surely pass on the additional Excise tax to consumers.
According to what was intimated, before May 2018 there was a 20% custom duty levied on importation of Margarine, which was increased to 30% in May 2018.
Lamentably, it has now been increased by 65% which has been deemed as a big blow especially at this material point in time when most business entities have been seriously affected by the prevailing corona virus.
It could be recalled that margarine butter has been consumed in this country for quite a long period of time now and many people love it especially children.
However, with this astronomical rise in excise duty it now seems that it will be out of the reach of many because it is obvious that the price of one packet of margarine butter will definitely go up.
A Social Commentator has averred that during these difficult times when cost of living is going up every day Government should consider reducing tax on daily needed items like margarine.
“Margarine is consumed by ordinary citizens everyday – as bread and butter is considered to be the second staple food after rice. Why increase tax on stable food?” he asked rhetorically noting that such is inappropriate especially when import duty was increased from 20% to 30% in May 2018.
Indeed it is understandable that the Government is in dire need of revenue which could have influenced the National Revenue Authority (NRA) to increase custom duties. However, it must be remembered that the bulk majority of Sierra Leoneans are grappling to make ends meet and astronomically prices could deepen poverty.
It is therefore against this backdrop that it is prudent on the part of Government, especially the NRA, to have a rethink and do the needful.
If the Government, headed by President Bio, is keen on wooing investors then it is high time that the right enabling environment is created in a win-win manner so that development could materialize quickly and the standard of living of the majority is enhanced.
It must be underscored that where the cost of living is high then the standard of living will definitely sink low.