Finance Act…
BIO SOUNDS CITIZENS’ DEATH KNELL
By Ibrahim Alusine Kamara (Kamalo)
Sierra Leoneans may have been devastated by President Maada Bio’s signing into law of the Financial Act for the Fiscal Year 2024.
The Act embeds several new taxes that are now implementable having been signed by the president, meaning that a 5% tax on imported rice for the fiscal year 2024 and 10% for 2025, 20% import duties on cement, 5% on cooking gas, and 10% on iron rods, with a 1% Education Levy, 6.5% contractors’ withholding tax rates for residents and 11.5% for non-residents, as well as a 15% Withholding Tax rate on Management, Professional Fees, Rent, and Lottery Winnings, all are now payable.
It is now mandatory by law also for the payment of Excise Duty on plastic products, 10% Excise Duty for gambling, betting, and lottery, including the payment of income tax on Google, Meta, and Amazon digital products and services consumed in Sierra Leone.
Other vital provisions in the 2024 Finance law are the increment of the Goods and Services Tax registration threshold from SLE100,000 to SLE500,000, an amendment to the Customs Tariff Act, the reduction of the Minimum Alternate Tax (MAT) rate from 3% to 2% especially for loss-making companies, and the harmonization of Excise Duty rates for domestic and import sectors, except for beer and stout.
Whilst Stamp Duty has been adjusted with multiple rates for property and other transactions, GST on plant and machinery for agriculture, manufacturing, mining, and petroleum sectors is now exempted, and Demurrage days now shifted from weekdays to official working days.
The government says the Finance law mirrors the government’s commitment to fostering economic growth, encouraging investment, and ensuring financial stability through substantial revenue generation but observers have since rebutted this as not true, pointing out that the failure of the law to make provisions for a corresponding increase in salaries and business tax relief remains the shortfall, envisaged to bring about a diminishing return to it all.
Experts have, therefore, described the 2024 financial law as a “catalyst of misery” for Sierra Leoneans, citing that adding taxes on goods and services amid the notable economic challenges faced by the country is the final harbinger to diminish and kill the purchasing power of people and businesses.
For the experts, therefore, the 2024 Financial law is nothing more or less than a monster coming to escalate the economic woes of the citizens and could bury an already dead economy.
The citizens are feeling devastated because even before the Act was signed by the president after its parliamentary ratification, business people had already capitalized on the new law as January arrived, increasing the prices of everything in the market, especially the staple food rice which rose from NLe690.00 (Old Le690,000) to NLe760.00 (Old Le760,000) instant. This spells disaster as the cost of rice will further hit the skies in no time to aggravate suffering for the people.
Not only the imposition of taxes on imported rice and cooking gas stands to aggravate the high cost of living in the country but it also contradicts the government’s “Feed Salone” programme. Honestly, the government cannot talk about feeding Sierra Leone by ripping off the people they aim to feed, and the “Feed Salone” project is bound to fail if access to food becomes more expensive for the masses.
It should be remembered that a World Bank Report in 2023 indicated that half of the Sierra Leonean population struggles to put food on the table and others faced a food crisis.
Similarly, the World Bank raised serious concerns about Sierra Leone’s economic stability amidst escalating debt risks due to fiscal irregularities, increasing dependency on high-cost domestic borrowing, and the sharp depreciation of the Leone.
The World Food Programme also released a report which indicated a very alarming situation of hunger in Sierra Leone in 2023. It showed that 78% of Sierra Leone’s population was food insufficient, 20% in severity of food insufficiency, and 58% moderately food insufficient.
All of the above portrayed the country’s socio-economic situation as already awful, enough to have cautioned the authorities to not enact a law warranting the imposition of new or additional taxes on essential goods and services because it would worsen a seeming appalling trend, considering that the 2023 Consumer Price Index indicated a 64.67% inflation rate on food alone.
It must be emphasized, therefore, that the 2024 Financial Act comes as a recipe for hunger, starvation, and even death for the impoverished masses who before the implementation of the new tax regime could earn their daily survival only by a dint of luck or through seeming magic.