Home Economy Gov’t Loses US$300m On Tax Waivers …LRA Breaks Silence At Budget Hearing

Gov’t Loses US$300m On Tax Waivers …LRA Breaks Silence At Budget Hearing

by News Manager

By: Varney Dukuly

MONROVIA-The Liberia Revenue Authority has told members of the 54th National Legislature on Tuesday during the 2022/2023 budget hearing that Liberia is losing over US$300 million every year to tax waiver and incentive programs.

“Mr. Chairman, as we strive to meet the nation’s increasing demands for domestic Revenue, we also need to consider the impact that tax incentives and other generous policy regimes have on our revenue basket. Each year, more than US$300M is lost to tax waiver and incentive programs,” LRA Deputy Commissioner for Technical Services, Gabriel Montgomery said.

The Budget Committee at the 54th National Legislature is currently reviewing the draft National Budget by listening to various revenue generating institutions in the country.

Among other things, he mentioned that incentives can be good if they are targeted toward investment and growth promotion, and that specific requirements for qualification such as local content requirements, and employment are met.

He wants the government to revisit her incentive policies and monitoring frameworks to safeguard the country’s revenues.

“As we all know, Mr. Chairman, domestic revenue mobilization is the lifeblood of our country’s development. As donor support is drying up, we will continue to increase our reliance on the LRA to meet even more ambitious targets,” he said.

According to him, the need for adequate financing of the revenue authority and other revenue generating initiatives need to be prioritized.

This move, he added, is part of the conversation that he will like for the budget hearing committee to critically consider the LRA Deputy Commissioner for Technical Services informed the lawmakers that the LRA was pleased to announce that the collection for last year was US$742.5M.

“On the domestic front, we collected US$605.0M against a revised target of US$651.6m. Although Domestic Revenues fell short of its revised target by 7%, actual growth above the previous year, 2021, is US$25.9M or 4.5%.”

But, the total shortfall, he said, is below the revised target, which according to him, could be ascribed to forecasting errors. He said, over the years from 2018 to 2022, domestic revenue has remained on a steady growth path year-on-year, averaging 7.2% per year.

“Mr. Chairman, last year you gave us a gross revenue target of US$786.6M, which eventually grew to $811.6M due to the introduction of a US$25M supplemental budget in April,” the LRA official said Tuesday during the budget hearing.

Touching on LRA’s gains in terms of revenue collection, he added that it is largely stimulated by smart reforms in revenue administration.

“We have made significant progress in rolling out our electronic fiscal devices, and excise stamps, both of which are crucial in raising revenues, and reducing under- declaration and smuggling; our compliance clustering program has also gained traction, as well as the real estate decentralization pilot project in Margibi.”

The Liberia Revenue Authority is at the same time, craving for more funding for a number of administrative interventions.

Montgomery: “Our current fleet of cars and motor bikes is in need of revitalization; nearly all of our TBO’s and CBO’s need renovation and upgrade at those facilities. These critical interventions are needed to ensure that the LRA continues its progress of mobilizing more revenues for the provision of public goods.”

Related Posts

Leave a Comment