The 2024 Finance Act may have generated lots of debates amongst intellectual circles and possibly beyond. Some would look at it as heaping more burden on the people and others may take a dim view of it. What is however, very clear is that it is an act that shows how decisive the government of President Julius Maada Bio is, in raising revenue for the bankrolling of his Big 5 Agenda.
Never in the history of this country have we seen such determination to wrestle with profiteering by a few, whilst majority of the people and the government are losing. A little shudder beyond the surface would reveal a tactical effort in the Finance Act 2024, to halt the monumental losses government has been incurring over the years in the name of tax rebate, duty concessions and suspensions, as the case may be. Unfortunately, whilst the rationale of government is to break from the exploitation and fleecing of the people by a few business people, some don’t see it that way.
The suspension of duty on rice in 2008 during the global food crisis was to cushion the effect of importation of an essential commodity; one that is seen as a political commodity that has the tendency of bringing a government down. Whilst government gave up revenue from the duty on rice (and its quite huge), it was expected that the commodity would be available and affordable. Whilst availability has not been a challenge, affordability has become a huge burden for majority of Sierra Leoneans. And with government putting into motion a Feed Salone agenda that requires huge resources to push it forward, it is just prudent that the 10% duty on rice be restored, so that revenue generated from that is used for the Feed Salone project. Eventually when Feed Salone sets in (and we should all wish it happens), our reliability on imported rice would reduce and we might even be in a position to export rice. The economic benefits of that are better imagined than described.
The same argument can be advanced for iron rod and cement. These two items used to incur 20% and 10% duty respectively before 2019. But when Covid-19 hit and was followed by the Russian invasion of Ukraine, there was massive disruption in the supply chain of these two commodities. As a way of minimizing the impact of the twin crises on the people of Sierra Leone, government suspended duty on them. The intent was to keep the price within the pockets of the average Sierra Leonean. However, this was not the case and we witnessed a hike in the prices of these commodities to an alarming rate. So while government was losing revenue with the objective of maintaining low prices, the price increase does not support the objective. Government has deemed it necessary now to restore the duty on them in order to raise funds for other projects. It is even expected that iron rod production would soon commence in Sierra Leone, which can reduce the burden of importation. With that, jobs can be created and knowledge transferred locally, whilst other sectors would be given the desired attention.
Beyond just what has been explained the Finance Act 2024, is an eco-friendly document. Hazard taxes have been imposed as a way of protecting the health of Sierra Leoneans and also the environment. The Act has imposed taxes on tobacco of different variations, and timber. These activities are hazardous to the health of people and the environment. The Finance Act has not only levied taxes on them to raise revenue, but to check other social and environmental hazards. You cannot get it better than that.
As stated earlier, when read dispassionately, the Finance Act is a bold attempt at not only raising revenue, but to check the malfeasance in health and environment. It is a statement of intent by the government of President Julius Maada Bio.