By Foday Moriba Conteh
In Sierra Leone, the persistent challenge of high living costs continues to weigh heavily on citizens, largely attributed to the imposition of taxes on essential goods by specific business entities. With a pressing need for revenue in a largely unproductive economy, the Government heavily relies on taxation as its primary means of mobilization. However, this strategy inadvertently perpetuates a vicious cycle where businesses, forced to offset tax expenses, hike prices, ultimately causing economic strain for the majority of citizens.
Contrary to the promises made by the ruling SLPP Government to usher in a period of economic prosperity upon assuming power, the reality of exorbitant prices makes the envisioned “Bread and Butter” lifestyle unattainable for many Sierra Leoneans.
Prime examples of this predicament are the skyrocketing prices of essential commodities like butter and rice rendering them inaccessible to many households. The sharp increase in the price of butter can be directly attributed to elevated taxes, including a 30% rise in import duty, a 10% increase in excise tax, and a 15% hike in GST. Importers now grapple with substantially higher costs, reflected in the final prices consumers must pay.
As for rice, the restoration of the 5% import duty tax on imported rice in the 2024 Finance Act has led to an astronomical rise in the price of a bag of rice. This move, ostensibly aimed at raising revenue for the Government and promoting local rice production, is negatively impacting many Sierra Leoneans, especially considering rice’s status as a staple food. It is an open secret that a large percentage of Sierra Leoneans cannot afford to consume enough rice, with many going to bed on empty stomachs.
Traditionally, the private sector is the engine for economic growth, generating employment opportunities and significantly contributing to revenue mobilization through tax payments. It is imperative for any Government to cultivate an environment conducive to private sector growth as it plays a pivotal role in national development.
However, when policies or laws are stifling the business sector, hindering its growth, the consequences are dire. This scenario is not only impeding development but also translates into high prices for locally produced or imported goods and services, further burdening consumers.
While it is acknowledged that the Government requires revenue, it is essential to recognize the adverse impact of disproportionately high taxes on the majority of Sierra Leoneans already struggling to make ends meet. Such policies are exacerbating poverty levels in the country.
In light of these concerns, it is incumbent upon the Government, particularly the National Revenue Authority (NRA), to reassess their tax policies and take corrective measures to alleviate the burden on citizens.
Balancing taxation with citizen welfare is a complex endeavor, requiring careful consideration of socio-economic dynamics and policy trade-offs but it is not impossible for the Government of Sierra Leone to strike a delicate balance that promotes economic growth and social justice. Ultimately, effective taxation policies can contribute to building a more prosperous and inclusive society, where every citizen has the opportunity to thrive.
