PRIORITIZE LIBERIAN BUSINESES: Locals Deserve Same Freebies as Foreigners


Source:  FPA EDITORIAL

The government of Liberia must start giving striving local businesses the same tax waivers and import duty free breaks it gives foreign companies and ensure that businesses set aside for Liberians are protected from infiltration by foreign firms.

IN ITS QUEST to open the doors of Liberia to foreign investment, the Liberian government has from time to time sought to ease roadblocks standing in the way of foreign investors taking advantage of Liberia’s post-war investment climate.

IN THE PROCESS however, it appears the government has lost sight of its own local struggling businesses looking to break even or engage in businesses of their own.

TAKE THE PLIGHT of the local water producers for example.

IN RECENT WEEKS, many have been forced to put their businesses at a standstill or simply shut down, losing out to Foreign companies who some say came through the back door with lucrative incentives and tax breaks packages at the disadvantage of local water producers.

MANY ARE angry at the Liberian government for giving foreign companies like Aqualife, for example, massive import duty privileges and waivers while local producers are stuck with massive taxes and import duty fees.

ACCORDING TO the notary certificate and investment contract of Aqualife was granted a whopping 70 percent of the dutiable value of the Approved Machinery, Equipment and 70 percent import duties on five(5) industrial vehicles, for a period of two calendar years commencing from the effective date of the contract signed on March 19, 2007. The company is also granted import duties at a rate of 70 percent on spare parts and raw packaging materials. “The approved investment project shall be exempt from duties at the rate of 60 percent of the dutiable value approved imports of related spare parts necessary for the machinery and equipment,” according to the agreement.

THE TAX BREAKS to Aqualife is just one of many granted foreign businesses over the years.

IN 2008, TOLBERT was cited by lawmakers for illegally granting a tax waiver on a $150 million investment deal. However, the NIC boss told lawmakers in July that the waiver was “an honest error” even as opposition politicians called for his arrest. “Richard Tolbert, as Chairman of the National Investment Commission cannot and did not unilaterally grant Investment Incentives to anyone,” Tolbert told lawmakers.

The NIC boss explained: “Not one single company has been granted any form of income tax waiver by this Commission since this Government has been in office, although most investors request it and it is within our purview to do so under the Investment Code of Liberia. According to Tolbert at the time, the Government believes that once companies reach the stage of profitability they should share these profits with the State for the benefit of the people where they operate. I concur with this in principle and was part of the negotiating team that withdrew the biggest “tax holiday” that had been granted by a previous government, Mittal’s 5 year corporate tax holiday. The only investment area where major corporate tax holidays have been granted (outside of the Commission) was in the 2 concessions negotiated for commercial rice production where the investors were granted a 50% reduction in their corporate tax rate, which I support fully, in order to increase domestic food security in this vital commodity.”

ACCORDING TO TOLBERT at the time, the NIC, at the Ministerial level, deliberately decided to grant BRE the 100% duty waiver so as not to disadvantage a company that was doing an excellent job of job creation and export revenue generation. “If there is any potential liability on the part of the company it may be perhaps at most 1% or 1 ½% of the value of imported goods (10% of maximum 15% duty applicable on most capital items). Assuming Buchanan Renewable Energy brought in even $10 million worth of dutiable items, then one is talking about a potential liability at most of maybe $100,000 – $150,000 for a company that has contributed over $2 million to Liberia in social and humanitarian contributions over and above its capital investment. (The new owner of the company, Mr. John McBain has donated over $5 million in health, education and other charitable contributions to Liberia).”

WE WONDER why the ministerial committee has not to date sought it necessary to “not disadvantage” struggling and thriving Liberian businesses with the same kinds of breaks and waivers to encourage their contributions to the Poverty Reduction Strategy?

WHY SHOULD a struggling post-war government bend over and backwards to please so-called big foreign firms when its own people have to sweat out mere resources just to keep their businesses afloat?

IT IS HIGH TIME that the government implement an across-the-board duty waiver for all and not just those from outside or not implement one at all. More importantly, the government must work to make the business atmosphere friendly to its own struggling Liberians, doing their best to contribute to the post-war business climate. They deserve a decent break, nothing more, nothing less!!!

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: