All that is necessary for the triumph of evil is that good men do nothing’ - Edmund Burke


S I E R R A  H E R A L D

Vol 8 No 2

The tendency sometimes to protect perpetrators for the sake of peace...doesn't help society. Impunity should not be allowed to stand. - Kofi Annan on Waki report

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Date: Jan  5, 2010
As GST Confusion Spreads ...Shops 
on Abacha Street shut 

The initial reaction to the Goods and Services Tax (GST) yesterday Monday saw confused shop owners in the
Central Business District (CBD) in Freetown closing down their businesses paralysing economic activity mostly in the
retail sector.
Shops along Wilberforce Street, Ecowas Street, Regent Road, PZ area, Sani Abacha Street, Lumley and Free Street,
Rawdon Street and Goderich Street to name but a few were all  closed.
Some of the dejected shop owners who were found sitting outside their closed shops told Awoko that they shut down
their shops because of the implementation of GST.
The confusion was clearly evident in the explanations of the shop owners, many of whom did not seem to understand how GST works.Freetown shops closed
One shop owner said he shut his shop because he was told by other business people to do so. Other shop owners in the building materials and Provisions shops recounted
similar explanation. With some clarity however one stationery shop owner along
Rawdon street who asked not to be named told Awoko: ‘’initially NRA told us that
if you are selling for example an item that costs Le 100, 000, you should take 15% tax which will be  Le115, 000 to be paid by the consumer at the end of the day.
But now, the new understanding is that the consumer will pay Le 100,000 for the goods and the businessman pays Le 15,000 as the GST. 
That is the bone of contention’’.

He went on ‘’we had understood the information communicated to us during earlier meetings held with us
businessmen. Now what they say is that the percentages we pay will be given to us at the end of the year.
That we do not agree with, because we believe they lack the ability and capacity to do that”.
The owner of Cafe de la Rose restaurant, Rose Mary Cole pointed out that she was not against paying taxes but argued
that placing 15% on foods was too high and it will hinder business.

The earlier tax which was 10% and which did not go down well with the people was very difficult to be implemented
she further noted.

Hassan Lahai, a tax and auditing Lecturer for CAT and ACCA Students said his own understanding of the GST
is that it should be a fiscal policy in which government collects revenue for the development of the country.
He cautioned that even though it is government’s fiscal policy yet they should be mindful of its implications, the
effectiveness and the impact it will have on the lives of the people.
Lahai noted that the economy is not going on well at the moment and considering the fact that poverty is widespread ...
the GST is not good. ‘’Cleaning of the whole system should have first been done to bolster the income generation’’. 
Apportioning 15% will only add more burdens to the consumer. It is the ultimate consumer that will bear the brunt.
I do not think it is a wise decision, he said.

He continued that NRA said the GST takes on board seven taxes that the seven taxes have not been paid by institutions.
‘’ you have people that will only pay the 5% sales tax. So if they can use it as an excuse then it is misleading.” He
acknowledged that “yes people should pay tax but this type of tax will only create more burden added to the poverty.
It will further create loop holes for people to make money’’. 

What he thinks government should have or should do is, ‘’the whole set up needs lots of cleaning up so that government
will be able to get lost revenue and with that success they will come with GST. Also time was needed to sensitize people’’.

Meanwhile the confusion continues and NRA officials have refused to comment further waiting on senior government officials to now take over the public relations exercise.
By Ishmael Bayoh &Abibatu Kamara

Date: Jan  7, 2010
Over confusion Chamber of Commerce President says Postpone GST until Govt. is ready
The President of the Sierra Leone Chamber of Commerce Mohamed Babatunde Cole has called on government that 
“if the government knows that they are not ready to fully implement the Goods and Services Tax, they should be fair to 
the nation, and announce that they have postponed it until they are ready.” He added “let us start on a clean sheet”
The Chamber of Commerce President made this statement because in the ongoing confusion over the implementation of the 
GST, business institutions have continued charging 15% from consumers and there is no indication that they are keeping
proper records. 
Therefore he said this means that these monies collected are likely going to some of these business institutions free and 
thus benefit those businesses only since government is unlikely to know or get anything from what has been collected.
The Chamber President explained to Awoko that when the confusion started on Monday he called a meeting with 
Finance, NRA officials and Businessmen. 
Mr Cole said “we were there for three hours and no body of the business sector understood what the GST is all about.”Mohammed Babatunde Cole
Mr Cole said in his view, two factors are responsible for the confusion and he named them as –lack of 
understanding and trust. He went on to explain that “the people who are supposed to implement it as 
well as the consumers do not understand it”. 
Although he acknowledged that “you have few of them who refused to understand, but you have 
a big majority of them who do not understand”. He stressed that “our business community 
- majority of them are literate people.”
Apparently, he said, NRA tried to do a lot of sentization, but lamented that “the message did not get 
across,” stressing “I believe it could have been handled differently as the people still do not 
The Chamber of Commerce chief explained that, “in reality if they understand the implementation of how GST works prices 
should not go up.” He said for example “when you take someone who has over 200 items, you are supposed to take stock 
at the end of the year and you have to recalculate on all of the items, your cost, your insurance and freight and add 
your profit and then calculate the GST”.
He however lamented a lot of “people are not equipped for that, they do not have that know-how, it’s not possible 
to know, that’s the proper way how it’s suppose to have been done.” Mr. Cole affirmed further that if the people 
understand how the GST should be implemented “then you would have found out that prices should not have gone up, 
but they do not understand, they would tell you that you take GST 15% on the cost, noting that you have already 
paid 15% on the sales tax.” He went on to indicate that, “the GST is replacing sales tax, and not a new tax, the 
only difference is that it is the consumer that is paying it.”
“As a Sierra Leonean GST has a lot of good in it, if implemented very well the country would benefit.”
However, he cautioned that if they do not stop smuggling GST would not work, “and we understand that smuggling is 
rampant in the country.” He explained that those who smuggle will be selling at a lower price than those who have 
brought in their goods legitimately and have paid GST. He stated further that the people who smuggle give their goods to 
the petty traders for marketing at a low price. The people in the street will prefer to buy things at a cheaper price and so 
the businessmen who have paid GST will not be able to sell their goods quickly. Therefore he said efforts should be made 
to curb smuggling for GST to succeed.

Date: Jan  7, 2010
GST good and timely-MPs

The Chief Whip in Parliament Hon. Ibrahim Bundu and the Parliamentary Oversight Committee Chairman on Finance
Hon. Dr. Moses Sesay yesterday told Awoko at Parliament that the Goods and Services Tax (GST) was not only good
but timely.
Speaking to Awoko in an exclusive interview, Hon. Dr. Moses Sesay said that all civilised
and progressive countries have adopted the GST but said Sierra Leone was not only following
examples for its sake but painfully mindful that without GST, those countries will ever remain dependent on outsiders to finance them.
The Parliamentary Finance Committee Chairman also said Sierra Leone needs to generate her own resources which he considered as a stepping stone for development.
Commenting about the 15% to be paid as tax, he said “It is very favourable and it is the average throughout West Africa and in fact, it is the ECOWAS figure and all the 16 member states have adopted it.

Our understanding is that Guinea charges 17.5% and there is no country that goes below 15% and should it go beyond that percentage, it means not enough fund is generated.”

Asked when they were passing the GST Act, whether they took in to consideration the high level of poverty in the country, he answered that Sierra Leone was not the only poor country in West Africa and compared “Our colleagues in Guinea, Liberia and Guinea Bissau were using this same method and therefore it is not
unreasonable for us to have this for our people”.
He stressed that the GST was not a new tax but a combination of other taxes that were not effectively implemented.

He accused some rogue business people of orchestrating complications about the GST so that they could not account or pay proper taxes to Government. “These rogue business people have been used to generating huge profits but paying less to government.
Parliament have now put a stop to that so that they can pay appropriately for the improvement of roads, water services, electricity, medical facilities, education and infrastructure” he said.
With GST, the MP said Government’s revenue base will be increased and also services will be provided to the people.
The Chief Whip in Parliament, Hon. Ibrahim Bundu also agreed that the GST was good as it consolidates various taxes that
being dodged. He also said it gave opportunities for auditing undeclared taxes.
Hon. Bundu said since they passed the GST Act in February 2009, it was supposed to have been effected on September
2009 but it was extended by the President till January this year.
In his view, he considers the GST “as good as I studied it when it was brought to Parliament by the Ministry of Finance
and NRA. I represent my people here” he said “and I have come to the conclusion that it is a good law. We do not pass a bad law, we think some people are being ignorant of the GST.”

He simply stated that Parliament passed the law to enable government collect taxes and in turn to provide services.
Opposition MPs declined to comment on the issue.

By Ishmael Bayoh and Abibatu Kamara

Date: Jan  7, 2010
As GST confusion spreads … New prices surface in commodity market

Even though NRA officials have explained that there should be no changes in the price of goods as a result of the GST
Awoko investigations has revealed that prices for basic commodities comprising mainly food stuff have been increased
by shop owners and retailers thereby forcing consumers to cut an estimated 40% of their expenditures for basic food stuff. However our investigations also revealed that most of the wholesalers and retailers in central Freetown have not registered for GST, but their prices have been increased under the pretext that they are collecting GST. Most of the shops also do not have prices displayed on their goods, and there is no GST Certificate of Registration on display in some of the shops visited.

According to a Lebanese national who spoke to Awoko under condition of anonymity he said “we have not yet registered for GST because we do not understand how GST works, but we are trying to sell all our previous stock in the warehouse before we consider registering for the GST or leaving the country due to high taxes.”

He also said they have not made any increments on prices for basic commodities, stating that they are maintaining the
old price in their shop, as prices for rice and onion are still stable unless there is need for an increment. 

At the Fisher street market Commodity retailers expressed frustration and dismay over the escalating prices for basic
food stuff like sugar, butter, cooking oil among others. They grumbled that as a result their daily sales have been seriously affected.

Mabinty Sesay a commodity dealer told Awoko that her business did not make any meaningful profit last year and this year
has also started with another confusing GST.

“Our businesses are crumbling and most of our customers are complaining about the high cost of basic commodities, while
others have cut down on their purchases.”

Some Consumers on the other hand are also complaining that they can no longer afford to buy most of the basic food
stuff in the market due to the current increment on prices for basic commodities in the market. 

Items     Before GST 
After GST
Percentage increase
A bag of sugar 172,000 210,000 22
A carton of foam surf 45,000 53,000 18
A carton of butter 70,000 80,000 15
A carton of eggs 148,000 155,000 5
A carton of Jumbo maggi 300,000 315,000 5
A carton of chicken 67,000 75,000 12
A carton of sepia sardines 55,000 60,000 9

By Saidu Bah & Poindexter Sama

Date: Jan  7, 2010
As GST confusion continues NPA reverse GST payments

The Management of the National Power Authority has in a public notice issued yesterday Wednesday summarily reversed
“with immediate effect the Goods and Services Tax (GST)” which had been charged on customers who had purchased energy units on Tuesday 5th January. This is because according to the notice the Government of Sierra Leone has directed that GST is “not chargeable on Electricity (Energy and Non Energy) purchased.

The Public Relations Officer of NPA Mr. Victor Wilson Clarke in an interview in relation to the sudden management decision said that NPA was not briefed prior to the execution of the GST, adding that it was only after a meeting held with officials of the National Revenue Authority that management of NPA was informed that GST does not affect energy purchase.
As a result the public notice states that “all those who have been charged with electricity units on the 5th January 2010
should come forward with their receipts and a refund will be made.”

This action by NPA puts into clear perspective the confusion over the implementation of the GST.

By Poindexter Sama


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