I read in recent times about how the Commissioner of the National Revenue Authority allegedly refused granting duty waiver to a philanthropic(?) organization, the Fullah Progressive Union, for the clearing of two containers from the national quay, loaded with medical equipment, meant, as reported by newspapers, as gifts to two government hospitals – one in Bo and the other in Kono.
First, certain points must be made clear: The NRA came into being as a result of an Act of Parliament in 2002 and it was [and still is] charged with a number of responsibilities; among them, to generate revenue for government in the form of tax collection. And one such way of generating revenue for government is through the levying of tax on goods imported into the country, before clearance from the quay at Cline town.
Over the years, the United Nations Mission in Sierra Leone and the Special Court for Sierra Leone charged fees for the clearance of their imported goods into the country. Not only that, even an institution like the Awoko Press has been paying duty fees for the clearance of goods brought into the country under its name.
The Fullah Progressive Union should be commended for actually undertaking such a venture in donating to the hospitals, especially given the country’s current health situation where children are dying every other day, and even where government dispensaries at Cottage and Connaught hospitals are now being managed as private places.
But practically speaking, the Fullah Progressive Union must be mindful of certain facts. The medical consignments were passed through the ministry of health and sanitation but that does not, in any way, mean the goods should be granted duty-free concession by the National Revenue Authority
Prior to this time, all government ministries, departments and agencies were entitled to duty-free concession. But the Tejan Kabbah-led government came to grasp that that privilege – which was being extended to ministries, departments and agencies – was being misused and abused and so the government had to redefine the law in 2006 and that was done by our current House of Parliament.
In Section 4 of the Finance Act 2006, it is stated that “for the avoidance of any doubt, a government ministry or department shall [my emphasis] be liable to pay import duty on its import.” So the ministry of Health and Sanitation must be mindful of such legal provision. The ministry is entitled to pay a duty fee before the clearing of such containers from the quay. The minister could have done the Fullah Progressive Union some kindness if he had taken time to explain to them this, and many other facts.
The issue of duty-free concession, from the legal perspective, was actually transferred to the National Revenue Authority by the Finance Act of 2006, which states in Section 3(1) that “subject to section 110 of the constitution of Sierra Leone, the responsibility for duty waiver administration is hereby transferred to the National Revenue Authority, with the minister of Finance retaining responsibility for policy guidelines thereon.”
Not only that all eligible entities shall, at the beginning of each financial year, prepare and forward for the approval of the NRA, “exhaustible lists of goods in respect of which they will apply for duty waiver and the NRA may undertake stock-taking of goods in respect of which duty-free concessions are granted” [Finance Act 2006]. These are the provisions and people must go by them.
However, as explained by the NRA Commissioner during a press brief, the minister can now either ask for an Executive Waiver as provided for by the law, or even the House of Parliament can ask for such because the Authority should not be seen as compromising the law in favor of a government ministry, department or agency or even in favor of a relative to any of the Commissioners at the NRA.
From my investigations, I learnt that prior to this time, duty-free concession granted by the NRA was as high as 80 Billion Leones but the decision to cut down on the institutions entitled to duty wavier led to a drop in duty-free concession to 20 Billion Leones.
There are institutions which could be granted a duty waiver concession and among them they include Members of Parliament, who are entitled to a duty waiver for one vehicle duty, during their term in office. Also, students coming from studies overseas are also entitled to it, as are NGO’s. But should the ministry of Health be granted the much needed duty-free concession without due regard for the law? I certainly don’t think so.
Again, it must be noted that the Commissioner for the NRA is doing a technical job and nothing else. He was appointed into office by the president, who is a political head, but that is not pinpointing that he [Commissioner] is doing a political job.
We have seen how the commission has been able to generate revenue for the country to the extent that, from January to June of this year, the central government was only operating from what the commission was generating, since the much clamored donor funds are yet to come.
The high proclivity exhibited by the commission in helping promote the economy of the country must be appreciated by all, instead of prompting an incessant attack on the commission. I have even noted the political connotation given to the whole issues. Somebody alleged a few days ago that, because the minister of Health is PMDC and that the captain of the ‘ship’ wants to reshuffle his cabinet, efforts are now being made by people to frustrate the minister from succeeding in his work, thus leading to his sacking by the president .
This to me is out of context, to say the least, because whether the minister performs or not, if the president wants to ‘offload’ him from the ‘ship,’ that cannot be stopped by anybody. It would interest people to learn later that the medical consignments inside those two containers currently at the quay would end up finding its way along Lumley Street and Back Streets in private pharmacies.
Efforts to avoid tax payment by the Fullah Progressive Union, and even by the Minister of Health, to me, is a form of tax avoidance and tax avoidance causes significant loss of revenue to the government and such revenue could be used to fund improvements in health, educational and other infrastructural developments. Over the years, tax compliance in the country has been very low and it is estimated to be around 11.8 percent.
May we again just look at the legal implications surrounding the issue? If the Commissioner fails to raise revenue for government and if it allows government to lose money, he is liable to an imprisonment not exceeding three years. So as much as we expect the National Revenue Authority to be flexible in this direction, we must also take into cognizance the fact that the commissioner is doing his work, as stipulated by the NRA Act of 2002.
Such moneys, when generated, are not chopped by the Authority but are being lodged into the coffers of government. Section 111(1a) of the national constitution states that there shall be a consolidated fund into which shall be paid “all revenues or other moneys raised or received for the purpose of, or on behalf of, the Government.”
The Commission must not be blamed for implementing the law to the latter and, least people forget, the Finance Act 2006 was not enacted by the current government but instead by the former government of Dr Kabbah. And he [Kabbah] did that with good intention, that there should be ways of minimizing the way government loses money.
The Authority must not feel intimidated for any reason in its drive to generate more cash for the country. Countries like Britain and America are doing well today because their citizens know it is a responsibility on their part to pay tax and this, to me, should be seen as a social contract between the governed and the governors. We pay tax, and in return, government provides us with the needed development.
It is realistic that the government should be providing us with basic social amenities – good roads, modern medical facilities, etc. – but we don’t want to pay tax or other forms of revenues. How incongruous that could appear, indeed. The Fullah Progressive Union must finish its kind gesture to the people of Bo and Kono. You cannot take goods from the UK or US and leave them at the quay in Sierra Leone and expect that duty-free concession must be granted because the goods are a donation to the country.
(Freidman 2003) as referred to by the NRA recently in a public lecture by the Commissioner for the Chamber of Commerce, revealed that the use of public embarrassment of individuals by the South Africa Revenue Authority has been extremely successful because there is a culture which makes exposure of non-payment a source of shame. But if the same is to be introduced in Sierra Leone, I wonder what and how government ministers like Soccoh Kabia will say.
Recently, the Ministry of Information and Communication imported telecommunication equipments into the country through Salpost, but mindful of the provision that they are not entitled to duty waiver, the Minister, IB Kargbo, sat down with the Finance minister and the NRA boss and arranged ways of payment for the clearance of the goods from the quay. So for God and heaven’s sake, why can’t Soccoh Kabia do the same, instead of using other unthinkable ways to clear the two containers from the quay? Till then, jbaimba25yahoo.com is an email address. By John Baimba Sesay.