It was a surprising avalanche when the Sierra Leone Brewery Limited (SLBL) manager, John Mbonu, disclosed that “the National Revenue Authority (NRA), suspended the ECOWAS Trade Liberalization Scheme (ETLS) and slammed 30% tax on imported Star beer can.
Reacting to Awoko’s question as to why the newly launched Star beer can was expensive than the bottle beer, Dr Mbonu said, “it is part of the complaint we have and the qualms we have with government.”
“When we made the contract to import the can, the ETLS was in session, which means there should be zero import duty, but as soon as this was contracted the NRA suspended ETLS and slapped 30% import duty…” he explained.
Dr Mbonu noted that, “we have actually decided that except the 30% tax is receded we will stop the importation of the can because it is not profitable for us.”
At the moment, he said, “we are running at a loss. Because you can’t imagine 30% tax, which is why the price in the open market is about Le 3,000 per can, it should be something like Le 2,500 per can”.
Dr Mbonu said, “except the ETLS is reestablished the Star beer can is a flash on the palm otherwise it is not worth it.”
Speaking on why import the Star can instead of canning it in Sierra Leone, he said, “it is all market dependent. If you have market that is small you can’t put a canning line. Until we have a critical mass before canning would commence in Sierra Leone.” He explained that, “there is no doubt here that market would not grow, it has the potential there is noting going to stop the market from growing in the future,” he emphasized.
Dr Mbonu noted that the price was a problem “at Le. 3,000 retail with the same volume as the bottle beer makes it very difficult for consumers to purchase. This makes it difficult to justify selling it at that premium,” he said.
“If for instance the 30% tax was not there, then the sale would have been much more affordable,” Dr Mbonu noted.
However, NRA commissioner general Allieu Sesay has noted that “even if taxes are reduced prices would hike,” adding that, “if revenue can’t be raised it would hike the prices even further.”
Commissioner Sesay explained that reducing taxes decreased government’s much needed revenue and increased the profit margin of the business people.
Source within the NRA said taxes levied on alcoholic beverages: beer, stout, rum etc and cigarettes were excise duties. “This is a protective tax to regulate the consumption of these commodities,” the source disclosed.
By Ophaniel Gooding