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
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
The confusion was clearly evident in the explanations of the shop owners, many
of whom did not seem to understand how GST works.
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
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.
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
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
Meanwhile the confusion continues and NRA officials have refused to comment
further waiting on senior government officials to now take over the public
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
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.”
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
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
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
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
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
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.
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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