Montserrado County Senator Saah Joseph has issued warning to the Ministry of Finance and Development Planning (MFDP) and the Liberia Revenue Authority (LRA), accusing them of disseminating false and misleading information regarding the legislative passage of a law transitioning Liberia’s Revenue Code from Goods and Services Tax (GST) to Value Added Tax (VAT).
Senator Joseph clarified that the law in question has only been passed by the House of Representatives and not yet by the Senate, emphasizing that claims of its enactment are premature and misleading.
“Let it be clearly noted that the Senate or the entire Legislature has not passed that law yet, and those institutions, through their heads, should stop misleading our international counterparts and the general public,” he asserted.
He expressed concern over the lack of comprehensive public engagement and scrutiny regarding the proposed VAT system.
“When this law was introduced alongside the National Budget, it faced resistance due to inadequate information provided to inform our decision on transitioning from GST to VAT,” Senator Joseph stated.
The Lawmaker highlighted the necessity for the public to fully understand the implications of VAT on their daily lives, drawing comparisons to economic conditions in other African countries like Ghana and Senegal where VAT is being implemented.
“Unlike stronger economies in the region, Liberia may not be prepared to implement VAT revenue system without causing undue hardship to our citizens,” Senator Joseph cautioned.
Senator Saah Joseph referenced recent unrest in Kenya following similar fiscal policy changes and urged caution to prevent similar reactions in Liberia.
The Montserrado County lawmaker who chairs the Committee on Transport underscored the importance of rigorous public awareness and engagement before the passage of such a significant financial law.
“The law should undergo thorough scrutiny and public consultation to ensure that the interests of all stakeholders, especially the ordinary citizens, are fully considered,” he emphasized.
Currently, Liberia employs the GST system, which applies a single-staged sales tax to goods and services.
In contrast, VAT is a consumption tax levied on the value added at each stage of production or distribution, with businesses along the value chain receiving credit for taxes already paid.
The proposed transition aims to address the limitations of the current GST system, which has been criticized for its narrow base and inefficient revenue generation compared to regional standards.
The Senate is yet to concur with the House’s decision, and until such concurrence is reached, the transition to VAT cannot be deemed finalized as stated by the lawmaker.
Senator Saah Joseph’s cautionary stance serves as a reminder of the importance of transparency, thorough deliberation, and public education in shaping Liberia’s fiscal policies for the benefit of all citizens.
As the legislative process unfolds, the responsibility lies on both government institutions and legislators to ensure that accurate information is disseminated and that the concerns and interests of the Liberian people are adequately addressed before any final decisions are made regarding the implementation of VAT.
For now, the fate of Liberia’s tax reform remains in the balance, pending further deliberation and consensus-building among all stakeholders involved.
