By Tanu Jalloh
Sierra Leone on Monday introduced tough new measures including massive cuts in a bid to tackle the current economic crisis in the country.
The announcement, which followed an emergency cabinet meeting, also proposed stern measures that will force “all business outfits to pay outstanding arrears of taxes within 30 days”.
The cuts, which were announced a week after a visit to the country by the IMF, will affect recurrent and capital expenditures with President Ernest Bai Koroma equating the response to the economic crisis to that which followed the recent Ebola outbreak.
A State House Press Release says there will be a 30 percent cut “across the board” for the rest of the year and into the first half of 2017.
All domestic capital projects and contract for suppliers, all new purchases of government vehicles and allowances for local travels have been suspended “until further notice”.
Fuel allocations to all government offices, vehicle maintenance and monthly imprests have been halved, while overtime pay has been eliminated.
The government said it hoped to save Le309 billion (US$ 54.3million) by end of the year from a 30 percent cut in recurrent expenditure across the board. See full release here: http://www.politicosl.com/articles/press-release%C2%A0government-implement-policy-measures-tackle-economic-slowdown
Finance Minister Momodu L Kargbo says “achieving the 30% reduction in recurrent expenditure is the overall objective - the big picture.”
He told Politico that with proper implementation the “30 percent cut will be the minimum expected” implying it could be higher and more painful.
Government tax policies and the way they have been administered by the National Revenue Authority, especially in relation to a recent introduction and enforcement of a 15 percent Goods and Services Tax (GST) on electricity have come under serious attack from the public.
Copyright (c) Politico 2016