Ellen Issues Decree
-Seeks To Stimulate Economic Growth
An official order has been released by President Ellen Johnson Sirleaf ; the decree otherwise known as Executive Order No. 89 is intended to institute policy measures to stimulate economic growth by reducing administrative, business process requirements on concessionaires, small, medium-sized businesses and manufacturers.In a latest dispatch from the Executive Mansion the presidential decree says, “whereas, the Liberian economy, having experienced a protracted downturn in activities and slow growth driven by the continuous and persistent declines in the prices of and demand for Liberia’s primary exports of rubber, iron ore and timber; and whereas, this combination of events has contributed to the low level of business activities currently experienced in the economic out puts of the industrial, commercial and retail sectors; and Whereas, firms in all segments of the Liberian economy, including importers and exporters, face regulatory, administrative, and tax mandates and demands, which, during this period of protracted economic downturn, pose a burden heavier than would exist during periods of growth and expansion, and in many instances jeopardize the continuity of businesses:.
It added “whereas, today, during this period of protracted economic downturn, these firm, operating under these conditions also contend with a narrow local commercial loan market that causes them to seek loans and investments from cross-border capital markets, which, themselves, are postponing actions and decisions on Liberia-directed loans and investments as a consequence of the period of elections and political transition; “whereas, potential investors have curtailed or cancelled planned investments throughout the economy; and whereas, this period of protracted economic downturn, and this period of transition combine to produce consequences, which further excite expectations that the current situation will indefinitely persist; and whereas, continued health of the Liberian economy depends on expansion of investments by companies to strengthen economic growth, expand jobs creation; and stabilize incomes; in parallel with investments in the public sector.”
Further justifying the newest Executive Order, the dispatch declares, “Whereas, households, during this period of protracted economic downturn are burdened by difficult austerity measures, which disproportionately are affecting low income groups, and whereas, government revenues declined such that investments in public infrastructure and continued critical reforms of government institutions have slowed jeopardizing important achievements; and whereas, the prevailing economic and market conditions in Liberia highlight the need to develop tax policy and institute measures that incentivize and protect local industries”.
The Executive Order No. 89 indicated, “Whereas, the adoption of the ECOWAS CET effectively limits Liberia’s ability to use import duty as a tax policy instrument to protect local industries from unfair competition and dumping; and whereas, in the exercise of the Executive Power vested in the President by the Constitution, the President may issue Executive Orders in the public interest, either to meet exigencies or to address particular situations which cannot await lengthy Legislative processes.”
Based upon those issues cited, the Government of Liberia issued the Executive Order instituting policy measures to stimulate economic growth by reducing administrative and business process requirements on concessionaires, small and medium-sized businesses, manufacturers, sole-proprietorships, and partnerships.
According to the Decree, tax clearances issued by the Liberia Revenue Authority shall be valid for a period not less than six (6) months; this, the Order says, is intended to reduce the administrative burden associated with the frequent processing of tax clearance.
“Any and all Concessionaires, Registered Businesses, and Non-governmental Organizations, which have been granted Duty Free status by virtue of the prerogatives of the Executive or by Acts of the National Legislature for all or some of their activity shall not be abridged and henceforth shall be strictly adhered to and enforced in accordance with governing agreements.”
It further adds “All Tax Penalties and Interest are waived. Principal amounts, which are due and have been subjected to assessments of Tax Penalties and Interest, remain outstanding, and are not waived by this Executive Order. Collections of Principal due are to be enforced taking into due consideration the causes of non-payment and the aim to secure the status of going concern of the businesses concerned.”
On Import Declaration Permits, the Decree clarifies that, with the exception of goods that pose a threat to national security or public health, all companies, sole proprietorships and partnerships importing goods into Liberia for resale are exempted from seeking permits to import, a regime, which is administered by the Ministry of Commerce and Industry.
“Companies, sole proprietorships and partnerships must, however, continue to declare to the Ministry of Commerce and Industry, their intent to import goods into Liberia. This declaration henceforth shall not be used as a tool by any agency of the Government of Liberia to exercise discretion in the administration of the prohibition on Import Declaration Permits. The intent of companies, sole proprietorships and partnerships to import goods into Liberia for resale shall be expressed to the
Ministry of Commerce and Industry in a detailed import schedule, which the Ministry of Commerce and Industry shall promulgate within ten (10) days of the effectiveness of this Executive Order and make known by Official Gazette; and its use shall be at no cost to the public.”
It also talks about protection of domestic manufacturers and as a further mitigating measure, the Minister of Finance and Development Planning shall, by administrative regulation, impose a surcharge not exceeding 10% advaloremon goods imported into the country in such quantities that may undermine the survival of local manufacturers.
Meanwhile, the following holding Forest Management Contracts are revised to use the fees and rates stumpage fees and rate 6.00%; Export fees and rate 6.00% and port handling fee (per cnm) is put at US$.5.00