LIMPAC Hosts Validation Session on Study Report: Accessing the Challenges with Domestic Resource Mobilization with Emphasis on Tax Administration

  • A validation session on the research study; assessing the challenges with Domestic Resource Mobilization with emphasis on Tax Administration was presented to the Ministry of Finance and Development Planning (MFDP), Liberia Macroeconomic Policy Analysis Center (LIMPAC) and tax professionals from the Liberia Revenue Authority (LRA). The study funded by the African Capacity-Building Foundation (ACBF) was done by Consultant Management Enterprise and supervised by LIMPAC. 
  • According to Mr. Charles Minor, lead consultant of CME and also former Chairperson of the Board of Tax Appeal (BOTA) in Liberia, the purpose of the research was to identify the administrative hurdles impeding domestic resource mobilization initiatives in Liberia. The MFDP represented by Hon. Tanneh G. Brunson, the Deputy Minister of Budget and Development Planning thanked the ACBF, research team, and LIMPAC for their collective efforts in completing the studies. She emphasized the importance of domestic resource mobilization for financing developmental programs earmarked under the Pro-Poor Agenda for Prosperity and Development (PAPD). The outcome of the study discloses that there are many challenges confronting the taxpayers (large, medium, and small) and the tax administration authorities that directly and or indirectly affect resources mobilization in Liberia. Some of these challenges noted were:
  • * Inadequate automated system for collecting data on taxpayers
  • * Lack of electricity at rural tax collectorates
  • * Poor tax awareness
  • * Challenges with payment verification by mobile money users
  • * Poor tax payment attitude by Liberians
  • * Inadequate audit staff at the LRA
  • * Large informality of the Liberian economy
  • * Among other challenges
  • Amidst these challenges, some key recommendations the study proffers include the followings:
  • * Automation of tax administration systems for taxpayers in order to reduce time and compliance costs
  • *Speedy transition General Agreement on Trade and Tariff (GATT) as per World Trade Organization (WTO) regulations to avoid the different assessment methods been employed by the LRA to various importations into Liberia. The use of the GATT method will restrict inspection to destination thereby eliminating the different types of inspection methods that importers are being subjected to.
  • * Implement Robust tax awareness to educate the citizenry and improve tax payment culture among Liberians.
  • * Coordination among tax administration authorities including the LRA to harmonize tax administration procedures and practices.
  • * Migration is to value-added tax should be considered to expand the tax base and increase domestically mobilized resources as is been done in almost of tax jurisdictions within West Africa. On the this recommendation, the participants including tax practitioners from the LRA and the Tax Policy Division within the Ministry of Finance & Development, urge the government to provide sufficient education and awareness before the migration to VAT. The education and awareness will increase the public acceptability of the VAT, since migration from the Good and Services Tax (GST) to VAT will increase the consumption tax rate.

At the end of the session, Hon.Tanneh G. Brunson lauded Consultant Management Enterprise for the presentation and stated that the MFDP and the GoL will utilize recommendations of the study. For his part, the LIMPAC Executive Director, Mr. Del-Francis Wreh thanked the Consultant (CME) and participants for their contributions to the session and requested the CME to incorporate suggestions of the participants where applicable in the report before final publication of the of the report.  Mr. Wreh also reminded the participants that the study only focused challenges with Tax Administration because there have been numerous studies on the tax policies with respect to domestic resources mobilization. The LIMPAC Executive Director used the forum to thank the ACBF Project Officer, Mr. Dickson Antwi for using some his time during his current mission to Liberia for attending the validation session.


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