By Nasratu Kargbo
The Director at the National Minerals Agency(NMA) Julius D. Mattai has condemned discretionary tax incentives in the Sierra Leone mining sector. Speaking at a panel discussion during the Economic Association of Sierra Leone’s 1st annual conference on the 25th November 2021, Mattai explained that discretionary incentives are dangerous as they are abused. “It is extremely dangerous when you give discretion to institutions or individuals who are morally bankrupt, ethically, professionally and are devoid also of the skill set that are necessary to work with mining companies”, he said.
Speaking on the topic ‘Discretionary tax incentives in Sierra Leone’s Mining Sector: a hindrance or long term optimal policy tool for domestic revenue mobilization’, the director said he is against discretionary tax incentives and explained that they do not only serve as long term hindrance but also on short and middle term basis . He noted that there are four instruments that regulate the mining sector, and also a discretionary mining agreement, which he said “is not legislated anywhere in our mining laws”.
Giving statistics, he said that the discretionary incentive “is not working”, noting that the contribution of the mining sector to the GDP in 2019 and 2020 is 1.1%. He explained that the total mineral export for 2020 is three hundred and thirteen billions Leones, adding that the government got forty-four billion Leones, which according to Mattai does not add much to any serious economy.
In addition, he compared Sierra Leone to other African countries that export gold in 2020 , disclosing that 1.54 million dollars was the worth of the mineral the country exported whilst in the case of Ghana it was 6.3 billion dollars and Guinea 1.3 billion dollars. He also stated that in 2020 funds were not allocated to the management of the mineral sector and that the same thing wasa repeated this year.
Mattai said that he is not against giving incentives, but “it should be statutory, legislated and transparent”.
Public Policy Analyst and former Commissioner General for NRA Alieu Sesay also explained that discretionary incentives are a hindrance to resource mobilization. He explained about the different types of tax incentives, namely the statutory which is a legal instrument and the discretionary which allows for an individual to sit and negotiate. Sesay said discretionary tax incentives have created unethical practices and their tax basis has eroded.
He explained that Sierra Leone is a rich country, but most of its people are poor because the country does not manage its resources well. He recommended that Sierra Leoneans rethink to know what is really wrong
He suggested that a special fund be set aside for the environment, noting that mining activities destroy the community, and disrupts certain activities such as agriculture. He stated with such a fund, the community can be developed.
Copyright © Politico Online 29/11/21
