By Mabinty M. Kamara
Officials of the National Revenue Authority (NRA) have explained that the Electronic Cash Register machines introduced for ‘efficient and easy’ tax administration target only businesses with a turnover of 100 million Leones, an equivalent of 10,000 US Dollars.
The officials were speaking at a press briefing meant to clear misconceptions and concerns raised in the last meeting with the Sierra Leone Importers Association about the machines for which installations and compliance are now being enforced.
The NRA Commissioner General, Dr. Samuel S. Jibao said that the Goods and Services Tax (GST) is not levied on essential goods like Rice, flour, baby foods, etc.
Speaking on the concerns raised by the Sierra Leone Importers Union, in relation to the ECR machines being a disadvantage to them over small businesses that sell the same goods as them but do not charge GST, Dr. Ibrahim Kamara, Commissioner, Domestic Tax Department said that it is not true, and asserted that it is in fact the big business owners that have a competitive advantage over the small businesses.
“And also they have what they call allowable deductions. We have all other costs you incur to do the business included. So all of those legitimate deductions reduce their profits for income tax liabilities. Look at what happens to the small businesses, we are charging 3 percent on their turnover. We are not recognizing any expenses they are incurring in running their businesses so even if you are not making enough profit what the law is saying, you pay from the sales,” he said.
He said they determine the turnover rate of a business by various factors including declaration by the business owner to the NRA of the annual shop rent, etc.
He said if one fails to declare, then the institution is left with no choice but to presume until proven beyond doubt by the business owner.
“So we are not targeting those petty traders, were not targeting those small shops, that have less than Le100 million and we are also not charging goods that are not GST chargeable,”
He said the misconception emerged from the fact that people have not been showing interest in the issue when they were doing door-to-door sensitization and awareness-raising about the use of the said machines.
However, Kamara said they have noted the concerns of the union and that going forward, they intend to meet with the executive of the Importers Union and present a work plan that can be cascaded to the rest of the association members.
He noted that over 80 percent of those that attended the meeting were not dealing in taxable commodities and do not know that the machines do not target their businesses in any way yet they were saying they will not accept the machines.
The Commissioner-General said that the government has done tremendously in reducing taxes on essential goods and those that affect the poor more. “For the government to be able to remove taxes on commodities continuously, and to have money to run the state, we can only do that if we broaden the tax base,” he said.
He, therefore, encouraged the people to be tax compliant and embrace the issue of broadening the tax base. Speaking on the hike in inflation, he referred to it as “imported inflation,” saying that most of the goods consumed in Sierra Leone are imported, and therefore, any issue that affects the manufacturers, directly affects the country.
Speaking at the event, Civil Society representative William Saio Lamin of Equality Now-Sierra Leone pledged his commitment in ensuring sensitization of the public over tax compliance. He said as Civil Society organizations, they are always on the neck of the government to embark on development projects in communities and the country at large. He said the government needs money to implement those projects and that overreliance on donor funds does no good to any country.
Copyright © 2022 Politico Online (23/02/22)
