By Crispina Taylor
Parliament has enacted a new tax law known as the ‘Finance Act of 2016’ and it is geared towards improving on the revenue situation of the country.
The new law has increased the income tax, commonly known as the Pay As You Earn (PAYE), to compel high income earners to pay more tax.
In the deliberations that preceded the enactment recently, Minister of Finance and Economic Development, Kaifala Marah, told members of parliament that the new law would raise PAYE tax from 30% to 35% which every salaried worker was expected to pay monthly.
Dr Marah said the new Act, in addition to increasing the domestic revenue mobilisation thereby enhancing the country’s gross domestic product, was also designed to help in women’s empowerment.
The new law, the minister said, would amend certain sections of the Goods and Services Act of 2000, Income Tax Act of 2000 and other tax laws.
“This is geared towards stimulating the economy to feed the national budget; those at the top should sacrifice for the vulnerable,” he said.
In his contribution, majority leader Ibrahim Bundu told colleague parliamentarians that tax was the “nerve center” for revenue collection by government. Bundu noted that government did not have enough tax options as some income generating institutions made money for government only once in a year, making specific reference to the transport sector.
“The transport sector is not properly taxed as they have a one-off payment annually,” Bundu said.
In a related development, when the question of fuel price arose in parliament, Marrah told members that the fuel pump price would remain the same - Le 3,750.00, because of the “depreciation” of the Leone as against the US$ dollar. He told parliamentarians that the government had spent Le150 billion on petroleum subsidy.
Rado Yokie, MP, an economist, explained to parliamentarians that provision of subsidies by government to lower the price of petroleum was bad for the country’s economy. Yokie noted that benefit of subsidising fuel would go only to the mining companies who “were getting the bulk of it.”
(C) Politico 17/03/16
