By Sorie Fofana…………………….
The Sierra Leone Parliament passed into law, the Finance Act 2016 in March this year. Section 22 of the Finance Act, gives NRA (National Revenue Authority) the carte blanche to determine the Custom Duty (Excise Duty) to be paid by importers of alcoholic beverages.
The National Revenue Authority has increased the Excise Duty on imported alcoholic beverages by one thousand percent. This has, as expected, led to the sudden increase in the can or pint price of imported beer sold by retailers across the country. A carton of imported beer previously sold at Le150,000 is now selling for Le500,000 if only it is available in the open market.
The decision by NRA to increase Excise Duty on imported alcoholic beverages has been roundly condemned as mindless and senseless. Some importers have decided not to import a single carton of beer into the country again as a result of this cut-throat increase in Excise Duty recently implemented by NRA.
The effect of the implementation of this senseless Excise Duty increase can be felt in the informal employment sector. A lot of people would have to lose income derived from the retail sale of some of these imported alcoholic beverages. A lot of jobs in the supply chain will have to be scrapped as well, thus adding to the massive unemployment figures already plaguing the nation.
NRA stands to lose a lot of revenue if importers of alcoholic beverages decide not to place new orders for these products.
Also, it will lead to massive smuggling of imported alcoholic beverages through Sierra Leone’s porous border crossings points with Guinea and Liberia.
It will also lead to unfair competition in what is expected to be a free market economy. The choice of alcoholic beverage consumption will be limited to only poorly and locally produced alcoholic products like Boy Pikin, Bitter Cola with all the health risks that go with it.
European tourists intending to visit the country will have to think twice if they want to come to a country where their favorite alcoholic beverages like Becks and Carlsberg beer are no longer sold in hotels or in beach bars and night clubs.
The increase in Excise Duty on imported alcoholic beverages is an attempt by the Government to prop up a poorly managed Sierra Leone Brewery Limited. Shareholders at Sierra Leone Brewery Limited have not received dividends from the company for the past several years. The company continues to record losses on a year-on-year bases.
In 2014, the company reported a loss of Le33 Billion. In 2015, it reported a loss of Le50 Billion.
How can poor imported alcoholic beverage consumers be made to surreptitiously bail out a failing company like Brewery? The company’s local shareholders are becoming fed up with the way and manner in which the company is being poorly run.
NRA should go back to the drawing board and consider the interest of the majority of Sierra Leoneans against protecting the interest of a few White foreign shareholders at Sierra Leone Brewery Limited.
This increase in Excise Duty on imported alcoholic beverages is totally unacceptable in a free market economy. This will kill the proverbial goose that lays the golden egg. Think about it!