Development partners on Tuesday demanded for a speedy enactment of the Revenue Management Bill after being shocked by the findings of the “Losing out-Sierra Leone’s Massive Revenue Losses from Tax Incentives” and the “Taxation and Inequality in Africa” Reports.
This was disclosed in a position paper presented by the Co-ordinator of National Advocacy Coalition on the Extractives (NACE) Cecilia Mattia during the launch of both reports at the Hill Valley Hotel in Freetown.
The report which reveals that tax breaks for multinational companies outstrip spending on schools, clinics and other developments was an outcome of a research conducted by Budget Advocacy Network, National Advocacy Coalition on the Extractives, Christian Aid, Action Aid IBIS and Tax Justice Network- Africa.
According to the report despite the country’s strides in re-establishing security and democracy 12 years after the end of civil war, more than 50 per cent of its citizens still live below the national poverty line as Sierra Leone spends more on tax give-aways than on its development priorities, with mining firms the biggest beneficiaries.
The report recommends that the Bill should commit the government to produce an annual public statement on its tax expenditure, the beneficiaries and the revenue losses and ensure that the Bill includes an additional clause that mandates the Ministry of Finance and National Revenue Authority to provide parliament with a cost-benefit analysis of all tax incentives granted.
It was recommended that the government should abolish discretionary tax incentives, especially those given to individual companies or organisations and to ensure that any tax incentives granted must be in accordance with national legislation which means that all current mining agreements must be reviewed in line with legislation.
The report recommends that the government should work with other governments in the Economic Community of West Africa States (ECOWAS) to ensure that there is no regional “race to the bottom” in lowering tax rates and increasing tax incentives to corporations.
The Deputy Commissioner of the Anti-Corruption Commission, Shollay Davies described the tax concessions as a necessary evil and naked corruption to encourage foreign investment in a country where the human capital and infrastructural capacity is weak.
Analyzing the importance of taxation, Commissioner Davies stated that taxation is very crucial to the existence of every state for which many countries consider the evasion as an affront to their proper existence. “It is our attitude towards taxation that is responsible for the slow development of the country” he stated.
He noted that the inadequate disclosure of existing income in the country poses major challenge to tax collection for which he urged the National Revenue Authority and the Ministry of Finance and Economic Development including the necessary partners to address the issues.
Thursday April 17, 2014