International Funding Donors Embroil in Local
Politics: Who Pays the Piper calls the Tune
Abdul R Thomas
Editor - The Sierra Leone Telegraph
12 January 2010
Sierra Leone's International
Funding Donors’ press statement published today
in the Awareness Times (see
below), urging Sierra Leoneans to support
the government's newly introduced Goods and
Services Tax (GST), will no doubt add to the
political furore that has been ignited in the
country by the introduction of this unpopular
Tax. Many in Sierra Leone are now left feeling
perturbed, wondering about the role and function
of the international Donor Agencies in the 21st
Century.
Sierra Leone is a young multi-party democracy,
which like the mythical phoenix, has risen from
the ashes with rejuvenated youth, to give hope
for the rebuilding of a better future. That
future can only be built on trust, honesty, and
the upholding of liberal democratic freedoms.
The voice of the 48% of electorate that did not
vote for the present government is just as
important as the 52% who did, and that must be
respected.
No one in their right mind in Sierra Leone is
arguing against the need for taxation to raise
revenue. But in the absence of a robust,
credible and trustworthy management system and
infra-structure, for businesses to collect
payment, issue receipts and make annual taxation
returns, it matters very little whether the
principles and values underpinning the GST are
laudable or not. Billions of Leones in taxes
will continue to remain uncollected.
This unfortunate press statement by the
International Funding Providers, will only serve
to feed the frenzy of suspicion and distrust
that have been nurtured in the minds of those
that believe in the 2006/2007 regime change
policy of the international community in Sierra
Leone. Conspiracy theorists will no doubt say
that this statement is designed to consolidate
and perpetuate that policy.
The ill-conceived and erroneous notion, that
everyone must be supportive of every strand of
government policy irrespective of its merits,
smacks of the stuff that dictators are made of,
and is contrary to the values of a liberal, free
and democratic society.
Of course the people of Sierra Leone want to pay
taxes. But the overwhelmingly low propensity to
pay this arbitrary, exorbitant and
misunderstood15% GST, is the main reason for the
unfolding ‘non-compliance’. Prior to GST, there
were seven individual consumer taxes, with an
average of 5% levied on each. The GST burden of
price hikes could have been reduced if the
government had introduced the GST at 8% rising
to 15% by the end of 2013.
The International Funding Providers ought to
have advised the government of the unfairness,
disproportionality, and untimeliness of the GST
proposal, in order to avoid the present debacle.
Perhaps they should have asked the government to
commission a review of the GST framework and
implementation strategy.
That the International Donor Agencies see the
need to disseminate such press statement, is
clear evidence of insufficient support in the
country, either for the GST or the manner in
which it is being implemented by the
government. In which case, the expectation would
have been for the Donor Agencies to have
respected that status quo and proffer proper
advice to the government.
The International Donors have a duty to
safeguard and maximise the financial
contributions that they are providing to poor
countries. But it is also, certainly, incumbent
upon them to ensure that they respect the
democratic rights of citizens in those countries
to challenge the efficacy and veracity of
policies being implemented by their respective
governments. That is the democracy that Africans
are yearning for, which with the support of the
Donors, they can realise.
Any perceived interference in the affairs of the
country is unfortunately bound to raise and
reinforce suspicions, as to the impartiality of
the Donor Agencies operating in Sierra Leone,
irrespective of which political party is in
power.
While Sierra Leoneans are thankful for the $300
Million support given to the government to pay
for essential services such as education,
health, and water; there is a fine line to be
drawn between charity and servitude.
The people of Sierra Leone desperately need help
in developing the country’s non-mining
industrial base, especially the manufacturing
sector which has the potential to create at
least 200,000 direct jobs and another 50,000
indirect jobs through the supply and value
chains. This is where sustainable tax revenues
could come from.
Expansion of the economy through industrial
diversification, private business development
and job creation, surely, must be the priority
for President Koroma's government with the
support of the International Donors, if they are
truly serious about building the scope and
diversity of the government’s tax base.
This sad episode is a reminder of the
importance, for the people of Sierra Leone to be
encouraged to become the masters of their own
destiny and the government - their servant, in
achieving that dream, and not the other way
round.
So please give the people of Sierra Leone a
chance to enjoy their newly found democratic
freedoms, and right to peacefully and
constructively engage with the government in
order to shape public policy, without any
external coercion or otherwise.
The introduction of the highly unpopular Poll
Tax by the British Prime Minister, Margaret
Thatcher in 1990, was met with rejection by the
British people who felt that the tax was unfair,
disproportional and untimely. This led to the
repeal of the Poll Tax in 1993, to make way for
a fairer tax, known as the Council Tax. That is
the democracy that Africans are yearning for.
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JOINT STATEMENT BY
MULTI-DONOR BUDGET SUPPORT (MDBS) DEVELOPMENT
PARTNERS IN SUPPORT OF THE LAUNCH OF GOODS AND
SERVICES TAX (GST)
“The introduction of the new goods and services
tax (GST) on the 1st January 2010 marks a
historical milestone in the economic development
and prosperity of Sierra Leone. The new single
rate for GST replaces the previous domestic and
import sales tax, and other taxes, which
complicated the tax regime and caused low
payment compliance.
Sierra Leone has one of the lowest domestic
revenue bases in the World, at only 11.3% of GDP
in 2009. This makes the Country overly dependent
on foreign aid obstructs economic development.
Increased tax revenue is essential for the
improvement of public services. All GST revenue
are to be used to expand and improve the quality
of public services delivered to the citizens of
Sierra Leone such as health, education, roads
and water. A strong tax base is also a
fundamental part of a democratic, accountable
state.
For these reasons, the World Bank, European
Commission, African
Development Bank and UK Department for
International Development join the Government in
calling on all citizens, particularly
businesses, to support the implementation of GST
in the correct manner, and without a negative
impact on the poor. The economic development and
future prosperity of Sierra Leone depends on
it.”
DFID, World Bank, EU and
the African Development Bank - 7th January 2010,
Freetown.
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