By Mabinty M. Kamara
Minister of Finance Jacob Jusu Saffa has finally admitted the prevailing hash economic reality and said that the government needed to put in more efforts in order to stabilize the situation.
And to ensure this, Mr Saffa said, will require policy reviews geared towards enhancing domestic revenue mobilisation and job creation, among other measures.
The Finance Minister was speaking on Thursday in response to deafening public concerns over the hash economic conditions in the country. It had been a week of controversy over Saffa’s less than satisfactory response to the situation, from inflation of basic commodities to the fall in the value of the Leone, which analysts have blamed for the rise in prices of goods.
The SLPP Administration had said it inherited a broken economy when Julius Maada Bio was elected President in 2018. Saffa said to fix that problem, the government made frantic effort that yielded some results, which obviously failed to translate into easing the economic challenges faced by the ordinary Sierra Leonean.
The Minister cited the increase in the country’s GDP from 13% to 15.8% and the attraction of budgetary support from international donor partners, which he believes amounted to an endorsement of the government’s performance.
“Having said that, we as a government still need to do more to gain more,” Saffa told journalists at the government’s weekly press conference hosted by the Ministry of Information and Communication.
He said the solution to the problem largely lies on job creation and that this is what the government had been working on, citing ongoing strides in both the formal and informal sectors in agriculture, construction, and services, as well as the introduction of youth entrepreneurship programs designed to help young businesspeople grow their businesses beyond Sierra Leone.
“Economic analysis are difficult to understand, but we have tried as much as we can to know what’s wrong and if the policies are right. We are on the verge to turn around,” he said.
“Turbulences as it may appear, but with the right policies in place, we can make it,” he added.
A major part of the government’s strategy is to increase the domestic revenue base. According to Saffa, since tax is the largest source of government revenue, they have identified strategies that has the potential to increase inflows. One of such is the existing moratorium on tax concessions which was among several Executive Orders issued by President Bio shortly after assuming office.
This, according to the Minister, has allowed the government to review and monitor all duty weavers, the tax exemption policy, and introduction of an automated system to reduce human interface in tax collection.
The introduction of electronic cash register in order to maximize the GST gain is also another major aspect of the strategy the government hopes to make use of to turn the tide.
“GST gain as of now is not scientific, it’s based on what the business people will tell us. But with that system, it will register the sales and turnover of those business entities,” Saffa said. He added that they are also developing a tax administration system jointly with the National Revenue Authority (NRA) and statistics Sierra Leone which is designed to maximise revenue from rent and income tax.
However, one major hurdle the government is having to deal with is tax exemption for mining and manufacturing companies, which are cemented by legislated agreements. Saffa said they planned to introduce the digital tax exemption policy which will be legislated.
“Mining agreements have got a lot of tax concessions and we don’t want that to be at the mercy of any minister or government. Once it is legislated, you can only go for renegotiations,” he said.
© 2019 Politico Online
