As a result of the delay in the enactment of the Finance Act 2017 until July 2018, it took the National Revenue Authority (NRA) close to three months to administer the new tax laws.
Implementation of new tax measures were said to have taken effect on excise duty on cigarettes and luxury cars, according to Commissioner of Domestic Tax Department (DTD) Ibrahim Sorie Kamara.
He said, the Customs Service Department is currently implementing the one for luxury cars and very soon they will release the figures as projected by IMF. “We started implementing the ones for domestic tax with the collection of excise duty on cigarettes at the rate of 30% on sales. We collect on the average between Le1.5 to Le2 billion monthly.”
The Finance Act 2017, Section 16, states “…there will be 30 percent on sales tax for imported cigars, cherouts, cigarillos and cigarettes of tobacco or tobacco substitutes, including other manufactured tobacco and manufactured tobacco substitutes, including water pipe tobacco, “homogenized” or “reconstituted” tobacco, tobacco extracts and essences.”
In the IMF Country Report No.17/154, June 2017, the government agreed to a series of revenue measures including the excise on luxury vehicles with a CIF value of over $25,000 USD and an excise duty of 20%. The measure is expected to generate Le28 billion or approximately 0.1% of GDP in revenues by the end of 2017.
This followed an amendment in 2017 to the Excise Duty Act 1982, thereby inserting the new section 3A in Act No. 6 of 1982, on luxury vehicles… ”An excise duty rate of 20% shall be imposed on luxury vehicles valued at least USD$25,000, or its equivalent in Leones.”
Kamara said they are still monitoring the smuggling of cigarettes but for the first quarter they were a bit stretched due to the election. They have resumed meetings with the police to rejuvenate their collaborative efforts. The Authority, he said, will start raiding in the coming weeks and they will see how much they will be able to raise out of that.
“Smuggling is an illegal and underground activity, which destroys the economy,” said Commissioner of Domestic Tax Department (DTD), Ibrahim Sorie Kamara. They are now enforcing post-importation audits in a massive crackdown on shops and companies suspected of selling smuggled cigarettes.
The National Revenue Authority (NRA) said it is part of their strategy to curb smuggling amid indications that some brands of cigarettes and alcoholic beverages were being smuggled influencing the loss of much needed revenue.
The NRA has put in place several measures to curb smuggling and these include post-importation audits, which will be done to verify whether imported goods were properly cleared for Customs purposes.
“The laws are there. We will implement the legal operation to settle the tax evasion. This is affecting those who come through the legal channel, declare and pay taxes. The others who try to beat the system come in with their goods and sell at a lower price, thereby out selling those that go through the normal procedure.” ZJ/18/4/18
By Zainab Iyamide Joaque
Thursday April 19, 2018.
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