By Nasratu Kargbo
The Newly enacted Finance Act 2023 mandates vehicle owners in Sierra Leone to pay two hundred thousand old Leones annually per vehicle as an annual circulation levy. The Act was yesterday 4th April 2023 passed into law by the house of Parliament.
The Commissioner-General of the National Revenue Authority (NRA) Samuel Jibao and the Minister of Finance Sheku F. Bangura both at the pre-legislative hearing parliament on the 3rd of April 2023 asserted that the move is to generate revenue for the government.
Clause 8(1) proposes that “An annual circulation levy of Le200 shall be imposed annually on vehicles in Sierra Leone”.
According to the Act, “a vehicle shall mean a piece of mechanized equipment by which someone travels or something is carried, conveyed, or transported and shall include cars, trucks, buses, boats, airplanes, and three-wheelers (Keke) but excludes motorbikes and bicycles”.
Parliamentarian for Constituency 032 Mark Mahmoud Kalokoh expressed concern, saying the amount is too much, and pleaded that they have a rethink and reduce the amount to one hundred Leone.
“We will support you in terms of revenue mobilization, but equally so, as a representative of the people we are here to share with you the interest of our people and to protect them. Let us start with a hundred Leone,” said Kalokoh. He said the burden will be too much on the masses, explaining that there have been over 300% increments in license fee and that another two hundred Leones will be a problem.
Foday Mario Kamara from constituency 057 noted that the burden will be heavy on the car owners, as they have to pay insurance and license fee.
Kamara questioned whether the tax measure will strengthen the currency.
Most MPs expressed worries about the timing of the implementation of the policies, amongst them the MP for Constituency 042 Lahai Marrah who wanted to know whether the Minister and Commissioner General had in mind the ordinary masses before drafting the bill.
He stated that he did not expect an increase in taxes, but policies that will help alleviate the suffering of the citizens. He stated that businessmen and women are grumbling, adding that the introduction of the Minimum Alternate tax will suppress businesses.
The Minister of Finance in response said the taxes are meant to generate revenue, adding that those policies can help in bringing micro-stability.
Bangura also responded to concerns raised on the timing of the such a proposal to introduce these taxes, saying “I think the timing is right, in all of these measures we are trying to make sure that we optimize up to 2% of additional revenue collected by the NRA, to be able to support government’’
Bangura said they have to optimize tax to mobilize revenue domestically where there are loopholes. He explained that they have reviewed corporate taxes, noting that the country’s laws provide opportunities for companies to thrive.
He added that if the country’s currency is to be strengthened, the country should be able to export.
The minister said companies will have to declare the true size of their business and profit, stating that if not, they would have to pay the minimum required which will allow them audit businesses appropriately.
Speaking on the two hundred thousand ole Leones annual fee for vehicle owners, the NRA Commissioner-General noted that if one can own a vehicle they should be able to pay for it. He explained that the money collected by the Sierra Leone Roads Authority for licenses is not part of the commission’s revenue mobilization.
Jibao responded to concerns raised by MPs, admitting they are aware of the situation in the country, which prompted tax exemptions on many commodities to cushion the effects of the economic challenges faced by the people. He noted that they’ve placed tax waivers on commodities that benefit the poor such as fish, educational materials, and flour amongst others.
Copyright (c) 2023 Politico
