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JJ Saffa Outlines Risks to Economy

HomeAYV NewsJJ Saffa Outlines Risks to Economy

JJ Saffa Outlines Risks to Economy

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Among them he cited (i) a continuous slump in the price of iron ore, our main export commodity, could delay the resumption of iron ore mining, with negative implications for growth, revenues, and foreign exchange earnings; (ii) a further rise in the international prices of petroleum products and its implications for domestic inflation, given the full pass-through into domestic pump prices; (iii) and delays in the disbursement of budget support and subsequent implications for financing priority programmes in the 2019 Budget could adversely affect the outlook of the economy.

However, he went on to state that to mitigate these risks and increase the prospects of achieving the macroeconomic objectives, Government will pursue more prudent fiscal and debt management policies, proactive monetary policy, encourage stability-oriented financial sector policy and maintain market-based exchange rate policy. “This will be combined with reforms to improve the business climate and enhance productivity of agriculture, fisheries and tourism sectors,” the minister informed MPs.

According to Mr. Saffa, the key priority of fiscal policy in 2019 is to pursue fiscal consolidation including enhanced domestic revenue mobilization and improving the efficiency of expenditures. “This will create the fiscal space for the implementation of the flagship Free Quality School Education Programme and other social programmes to improve human capital development,” he told attentive Members of Parliament.

He went on to inform Honorable Members of Parliament that in accordance with the Finance Bill 2019, he presented for enactment a number of measures to improve domestic revenue collection which include: (i) broadening the scope and coverage of the Treasury Single Account (TSA) agencies to include the Sierra Leone Road Safety Authority, Sierra Leone Standards Bureau, National Civil Aviation Authority and the Pharmacy Board of Sierra Leone, (ii) elimination of GST waivers as part of duty waivers granted to all beneficiaries except international organizations and diplomatic missions covered by international conventions; (iii) elimination of GST waivers for the supply of materials for the construction of hotels; (iv) elimination of duty and tax waivers/exemptions for contracts awarded by MDAs for the supply of goods, services and works; (v) upward review of fees, licenses, rates, charges and levies imposed and collected by MDAs to reflect current economic trends; (vi) compulsory preparation and registration of Lease/Rental Agreements with rental value above the Leone equivalent of $1,000 per annum to strengthen compliance of rental income tax; (vii) introducing the labeling of imported raw materials designated for Sierra Leone to avoid under-invoicing and smuggling; and (viii) strengthening the enforcement of existing tax legislations by amending various provisions in these acts and the imposition of stiff penalties for defaulters.

The Minister of Finance further stated that in addition to the above policy measures; the National Revenue Authority (NRA) will be implementing a number of administrative measures to boost revenue collection in 2019.
He said the current tax administration processes and procedures are largely manual and the existing systems are not integrated. “This provides opportunities for close contact between the tax officials and the tax-paying public. It also does not allow an audit trail of business transactions for accurate assessment of tax liabilities. Therefore, with support from development partners, the NRA will automate tax processes and procedures in 2019 through the adoption of an Integrated Tax Administration System (ITAS) for domestic taxes, the web-based ASYCUDA World for Customs and Electronic Cash Registers for GST, among other policies” Mr. Saffa said.

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