The Foreign Travel (Ticket) Tax Act, 1975 (amended by Act no. 4 of 2004) required airlines to deduct 10% tax from the procurement of tickets by every person departing from Sierra Leone via ship, aircraft or other means of transport. The Auditor General 2017 report revealed that from January to June 2017 the effective tax rate of 10% was not properly deducted from the Foreign Travel Taxes (FTTs) made by Kenya Airlines and Air France. A re-performance of the calculations by her team reveals that the sum of Le1.1billion was not deducted from the sales made by the stated airlines and paid through the National Revenue Authority (NRA) into the consolidated revenue fund (CRF). The said Act also states that a penalty of 15% per month is chargeable where a person collects the tax and fails to pay it to the NRA on time. “It was also evident from my audit that the NRA did not levy any penalty charge on the concerned airlines. This may have resulted in the loss of government much needed revenue and thus deprived the Government from meeting its planned commitments” said Auditor General Lara Taylor-Pearce. She further urged the NRA to ensure that the difference in payment of FTTs is recovered and paid into the CRF and in the future, the regulation of deducting FTTs from the sales made by Airlines should be strictly adhered to. Furthermore, her audit faulted the NRA for not collecting arrears in respect of customs duty and domestic tax which were Taxes due for collection from individuals, corporate bodies and other institutions by the Domestic Tax Department and Customs Division of the NRA. The arrears which had remained uncollected stood at approximately Le16 billion based on their samples tested and most of the irregularities arose from assessed tax unpaid, as well as poor supervision of schedule officers, failure to enforce tax laws and financial regulations, and management’s failure to promptly settle disputes and sanction offenders.
Tuesday January 22, 2019.