By Amin Kef Sesay
Sierra Leone, as a country, has done little over the years in terms of enhancing the manufacturing of products that are meant for domestic consumption and even exportation. Much was not done in the areas of setting up industries and equipping them properly for them to be really productive. Lamentably, up to this moment the country rely largely on the importation of basic commodities, including its staple food rice, which otherwise we could easily manufacture here with the resultant effect of spending billions of Leones, on purchase and shipment that would have been utilized on other development projects.
Against the aforementioned backdrop, it is welcoming that attention is now being shifted to local manufacturing as is evident in more and more Sierra Leoneans getting involved in the manufacturing of a wide variety of goods and provision of services which are in one way or the other contributing to satisfaction of human wants and overall national development.
Lamentably though, most of those who are involved in the manufacturing sector have been expressing dissatisfaction over certain clauses in the 2020 Finance Act saying they are inhibiting the growth of their businesses.
It must be highlighted at this juncture that on a yearly basis, the Finance Act lays in detail taxes that are applicable to taxpayers in the country. Government does so normally by repealing and/or amending existing laws and/or enacting new laws. Every Finance Act must get the President’s assent of the Republic of Sierra Leone.
From investigation undertaken, all Government financial policies are included in the Finance Act ‐ new policies as well as changes made to existing policies. All the provisions of the Finance Act associated with a particular Financial Year are important but of utmost significance are the rules for Income Tax Rates.
It could be recalled that on the 8th November 2019, the Minister of Finance, Jacob Jusu Saffa delivered the Budget and a Statement of Economic and Financial Policy outlining the imposition and alteration of taxes to give effect to the financial proposals of the Government and to provide for other related matters for the financial year 2020.
The policies enshrined in the budget and others were enacted into law and constitute the 2020 Finance Act.
The Finance Act 2020 came into force on the 1st January, 2020. The Act created new laws as well as amended and repealed certain provisions of the Customs Tariff Act- 1978, Excise Act -1982, Income Tax Act,-2006, Finance Act- 2006, the Customs Act -2011, the Goods and Services Tax Act- 2009, the Public Procurement Act- 2016, the Public Financial Management Act- 2016, Extractive Industries Act- 2018 and makes some general provisions on other laws .
The Act amended the Schedule to the Customs Tariff Act 1978 by imposing a duty at the rate of 5% on raw materials and semi‐finished and finished product, respectively and at 10% on packing product for packaging industries.
The Schedule to the Customs Tariff Act 1978 was amended in Part II by inserting for raw materials for any manufacture each under their substantive Codes and the duty is 5%.
For semi-finished and finished products, including packing materials intended for use as inputs for manufacturing each, the duty is 5% and for packing products for packaging industries duty is 10%.
Local manufacturers see themselves to be disadvantaged by to the provisions of the 2020 Finance Act because of the onerous taxes which they are required to pay at border crossing points.
For the reason that they are paying, sometimes, more than one tax, it is therefore inevitable that those payments will have to be factored in the prices of the commodities they sell which consumers will have to pay for when purchasing these goods and services. It is therefore no surprise why today the prices of most basic items consumed by the bulk of Sierra Leoneans continue to rise astronomically.
The situation has been compounded by the outbreak of COVID-19 making things really tough for our local manufacturers.
It is understandable that the Government is in dire need of revenue to deliver on its promise to the citizenry of this country. However, such should not come at the expense of frustrating local manufacturers. Whatever way it is looked at one of the sure ways this country can develop is to increase productivity of goods that it produces internally, including manufacturing, which could be used for both domestic consumption and exportation through which foreign exchange could be earned.
Today, most countries are putting premium on enhancing their Local Content Policies instead of depending hook, line and sinker on others to produce what they consume. There is the need to protect our local manufacturers and industries to grow within the context of enhancing local content.
This is an appeal that our local manufacturers are currently putting across to the Government adding that efforts must also be made to redouble efforts in order to enhance affordability of safe drinking water, electricity supply, foreign exchange availability and other things that will increase their levels of production.
One sure way of doing this is to revisit the 2020 Finance Act, see were possible amendments could be made to create the leeway for favourable provisions to be available to local manufacturers to compete healthily and as such meaningfully continue to contribute to overall national development.
Indeed, Members of Parliament, the People’s Representatives, have a big role to play in this reformation cum amendment process.
