Business Community Grossly Misunderstands GST

The much talked about GST came into action on 1^st January 2010 amidst numerous speculations as to whether it will at all come into fruition. The GST unit in the National Revenue Authority before now had undertaken a series of sensitization moves using all possible media. The business community from the onset was kind of jittery, perceiving it as a burden and one that will make business unsavory for them. Taxation the world over is something that always brings mixed feelings and often causes ripple effects on both business people and the consuming populace who often bear the brunt of the problem. Sierra Leone indeed need to move from a predominantly donor to self driven economy. This is the only way a true and realistic development can take place. It will also guarantee the country a greater autonomy in its fiscal policies and development priorities as there is always the tendency for donors to dictate the development options of the country when a greater percentage of funding comes from them. Indeed, he who plays the piper calls the tune. Thus the GST came about in order to streamline the tax procedures and processes through the modernization process of   the NRA.  (Photo: Brima Karl Sumara)

Shivers down the Spine of Business People

It is now obvious that the GST is here to stay notwithstanding the series of threats given to consumers by businesses. Yesterday, shops in the major business district of Freetown were conspicuously closed. The rationale being an apparent protest to the instituting of the GST irrespective of the numerous stake holders’ engagements, radio and Television discussions undertaken by the GST unit. I took a ride around town to scan the atmosphere and assess the mood and feelings of people. Most business people do not even want to talk about it while some briefly remarked that the 15% charged is certainly not in their favour. Pushed further as to whether they really understand the GST, they would simply stress that whether they understand it or not does not matter and that it is simply a burden.

Why the GST is grossly misunderstood

Understanding of an issue is a ‘cine qua non for it acceptability’. It is obvious that a lot of publicity has been given to the coming of the GST but have people truly grasped the true nature of it? Often and again, I have heard the Acting Director of GST maintaining that the GST is not a new tax but a consolidation of seven other taxes that had hitherto existed and paid separately. Irrespective of this however, majority of people in the business community refuse to see it this way. They could not I believe, comprehend the dynamics of this tax system and are therefore apprehensive of it. I am of the view that they are even more confused when it comes to the computation of this tax thus a broader scope of enlightenment and sensitization is needed. The business community in Sierra Leone largely consists of foreigners who for years have been enjoying an almost tax free business climate and amassing wealth through excessive profiting at the detriment of the country’s economy thus Sierra Leone accounting to date for 40% of its annual budget while the remaining 60% comes from donors especially from Britain. In most of the taxpayers’ engagement meetings that were organized, it is often the case that few business owners actually attend some preferring g to send their accountants some of whom I believe do not adequately inform their bosses. It is therefore the case that the GST though presenting a lot of advantages for businesses and the government is kind of less understood. We must also however bear in mind that the tax culture in this country is far from being positive. Tax payers either from the business community or the local populace often responds to taxpaying with misgivings. Like the saying goes, the journey of a thousand miles begins with a step.  The tremors that we are now experiencing will definitely simmer down with time especially when conscious effort are made to sensitize the populace.

Haja Kalla Kamara, Acting Commissioner General, NRA

Hajah Kalla Kamara- Acting Commissioner General- Positive

 

A Gullible Population

The local population in Sierra Leone is highly gullible as a matter of fact. Thus they are easily manipulated and panicked. It was therefore not surprising that shop owners and business people were quick to poison the mind of people thus creating fear and confusion. I overheard one business man at Sani Abacha Street remarking that ‘people should buy what they can now before the GST comes into effect as they will certainly Sky rocket the prices of commodities. In a country where rumors swirl around like whirl wind, these statement and more of it spread like wild bush fire in the harmattan. The mind of the people was prepared in a short time and thus when shops closed down on the 4^th of January; it was easy for the impact to be felt. The onus now falls back squarely on the shoulder of the NRA to engage the minds of the citizenry.

Tit Bits on GST

The GST is not a new tax; it is a consolidation of seven old and outdated taxes. These taxes are Import Sales tax, Domestic Sales tax, Entertainment tax, Restaurant and Food tax, Message tax, Hotel Accommodation Tax and professional Services tax. These taxes put together are what forms the GST. It must also be noted that there are very essential items which because of their apparent importance are excluded from GST. These are excluded to cushion the effect of GST on poor consumers. They include, fuel, text books, piped borne water, Medicines or Pharmaceutical supplies, education and medical services and rice.

GST has advantages go for it   

One thing that people are not aware of is the obvious advantages the GST presents. Firstly, only big registered businesses are mandated to charge GST and these shops as a matter of must and expediency will be issued certificates which they must display at their place of business so people know that they should charge it. The system also makes available a trail of receipts for fraud to be easily uncovered to avoid cheating of customers. GST items must also be advertised to show the GST inclusive or exclusive price separately but clearly also. With the GST, government will be able to raise more money for spending. Social amenities can easily be provided while salaries can also be improved. If we are only patient and keen to understand it we will appreciate it. The GST will help mama Salone greatly so we must go for it.

By Brima Karl Samura

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