Sierra Leone News

The Goods and Services Tax (GST) still dominates discussions in market centers. A tin of Sardine sold for Le. 2,500 is now Le. 3,000. Palm oil locally produced is now almost Le. 2,000 per pint, which wasn’t the case in December 2009. Several other goods have experienced similar increase in prices. Even though it’s Herculean to determine the average percentage increase, the rise in prices (rightly or wrongly) has been blamed on the introduction of the GST.

But there is another side to the GST. The introduction of the GST in less than two months has also produced astonishing results. Last week the private lottery company Mercury International presented a cheque of about Le. 230 million to the National Revenue Authority as GST collected on betting products. Hopefully by the end of the year, Mercury alone would have paid over a billion leones as GST.

President Ernest Bai Koroma was elected on a platform of change. On the 17^th September 2007, the Chief Commissioner of the National Electoral Commission Dr. Christiana Thorpe pronounced Ernest Bai Koroma as winner of the Presidential Run-off at the British Council Hall in Freetown. Scores of jubilant President Koroma supporters jumped into the streets of Freetown celebrating their conquest over the Sierra Leone Peoples Party (SLPP) candidate Solomon Berewa. One of the songs they sang was an analysis of the increase in prices of rice, palm oil and other basic survival goods. Today SLPP supporters are saying there has been an upsurge in the prices of goods and services.

Prior to the 2007 elections also, the Sierra Leone economy was in bad shape. Foreign Investment was low, donor funds for development projects were misused and donors began expressing fatigue. This reality weakened the support of the Sierra Leone Peoples Party and the people therefore showed them the exit door. The Multi Donor Press Release in support of the implementation of the GST clearly shows what the donors wanted-the country should reform its tax system to support itself.

The GST can’t be blamed alone however for the rise in prices. When the price of fuel was moving upwards before 2007, transport fare increased and the domino effect of the rise in fares was seen in the cost of goods and services. It is always the case in Sierra Leone that an increase in the price of fuel will equally see an increase in the cost of goods and services. But when there is a drop, the prices of goods most often don’t drop.

Another unexplained side of the GST is how this tax regime conflicts with our usual practice of bargaining. Most often you don’t find prices tagged to goods instead you have to bargain to settle on the cost of items. A GST regime seems to dictate some form of price tagging and transparency which many in the business community completely hate.      

Attempts to score political points with the implementation of the GST surfaced and keep surfacing in all of these facts but the records at NRA state that the Former Commissioner John Karimu a strong financer of the SLPP was working on its implementation. As many have been asking for the delay in the implementation, the rush for the political score sheet ahead of 2012 has seen even some early critics justifying why the country needs GST now, now, now.

The GST is weighing especially on the majority but the approach of discussing it in green and red has blinded all to the additional financial burden it places on the poor and likewise the huge tax money being collect for the development of the country.