By SulaimanJuldeh Bah
Amidst debates over IMF’s suspension of support to Sierra Leone, Cornelius Deavaux, deputy information minister yesterday admits government intends raise subsidy but same may be subject to negotiation with the donor.
He admits of leakages in revenue collection, which among others have prevented government from meeting benchmark reforms by the IMF fund.
It is true the IMF recently confirmed suspension of support to Sierra Leone, but stated in a press statement saying: “the mission that visited Freetown during September 15-19, 2017 conducted the first review focused on performance under the program, economic development, the outlook for growth and progress on structural reforms.”
The release also mentioned that as part of the review, the mission based its fiscal assessment on broad macroeconomic aggregate, including the overall government revenue and expenditure envelop.
Furthered: “the completion of the review which would have enabled the disbursement of the second tranche of program financing has been delayed relative to the anticipated timetable of December 2017. The key reason for this delay is due to a weak budget revenue outlet. The IMF is currently working with the government to identify appropriate corrective measures that can be taken and when.”
That the government of Sierra Leone’s Extended Credit Facility program with the IMF is ongoing and government continues to meet its debt service obligation on both the current and outstanding loans to the IMF.
It is against this background that Deavaux sadly admitted that there have been leakages in government revenue collection drive, which he said was one of the areas agreed upon with the IMF to tackle if Sierra Leone is to continue receiving support from the fund.
He said government is currently working with the IMF to tackle the aforementioned challenge and that it will be a top priority on the agenda of the next government.
On the issue of payment of subsidy on rice importation, Deavaux said however that despite the above is one of IMF’s conditions, government will not remove subsidy at this time because of the huge economic burden it would have on the masses.
He said government is not prepared to remove subsidy on fuel importation because of the negative impact it would have on the livelihood of people.
His claims are that the decision of government to maintain the subsidy on rice and fuel importation has nothing to do with politics and the coming elections, adding however that they would be looking for other revenue generation alternatives to fill the gaps created by the payment of subsidies.
On the issue of tax waiver, he said the government has removed tax exemption on all goods that are produced or available in the country and is only giving tax waivers on the importation of heavy machinery and other equipment not available in Sierra Leone.
Meanwhile, the Ministry of Trade has announced the elimination of duty waiver and tax exemption on imported cement, he said.
This is in line with development policy objectives, including enhancing domestic revenue mobilization, production levels, employment generation and sustained economic growth and in accordance with the Local Content Legislation that government shall no longer grant import duty and GST waivers on imported cement.
Trade Ministry maintained that government will only allow companies contracted to execute infrastructural projects to benefit from tax waiver privileges if the local cement industries have signed an undertaking with them on grounds of quality and standards for cement and adequate market supply.