In a bid to boost revenue collection, NRA (National Revenue Authority) has commenced the implementation of Section 22 of the Finance Act 2016.
This Section of the Act gives NRA the authority to increase Custom duty (Excise Duty) on imported alcoholic beverages by one thousand percent, as it is the case now.
On 15th June 2016, some well-known importers of beer brands in Sierra Leone wrote a letter to the Commissioner General of NRA, drawing her attention to the fact that, this new tax increase will have a devastating effect on the national economy. They wrote, “As additional excise will be US$48 per carton (on 500m which are the most saleable size) the informal sector will start smuggling from porous border crossing points.
This shall adversely affect NRA revenue collection”.
The beer importers added, “Madam Commissioner General, you will agree that with the current economic situation, where the majority of people are struggling to make a living due to sharp increase in cost of living due to various factors, this very high increase shall add to the suffering, increase unemployment and result in huge loss of revenue to the Government to mention but a few”.
In a letter to the Minister of Finance and Economic Development dated 30th June, 2016 the importers of alcoholic beverages informed him that, the move by the Government to implement Section 22 of the Finance Act 2016 “Is not financially nor commercially viable as the market disposable income and purchasing power of pay packages cannot absorb such an increase. In short, these products will be out of the reach of most consumers”.
Some senior NRA officials confirmed to the Global Times last night that, they were not consulted before the Bill was taken to Parliament. “We would have given the Government our professional and rational view on this tax increase if our views were sought before the Bill was taken to Parliament…As it is now, we are merely implementing a law passed by Parliament,” he said.
A retailer of one of the brands of imported beer told the Global Times yesterday that, the Government decided to increase Custom duty on imported beer in order to help the failing Sierra Leone Brewery Limited. He asked, “Why should poor imported alcoholic beverage consumers, be made to pay for the administrative failures at the Sierra Leone Brewery Limited?”
Sierra Leone Brewery Limited reported an annual loss of Le50 Billion last year. The previous year, the company reported a loss of Le33 Billion.