GoL to Establish Semi-Autonomous Revenue Authority
Finance Minister, Amara Konneh, has announced that government already taken policy decision to establish a Revenue Authority that is consistent with international best practices and appropriate for the Liberian context – a semi-autonomous revenue authority; rather than an Authority which would be autonomous and “law unto itself”.
The minister who was one of three panelists of the Governance Commission fifth Policy Dialogue on at Government Committed to Establishing Semi-Autonomous Revenue Authority; But Others Think More Discussion Needed.
According to a Governance Commission release, Minister Konneh said within the grand scheme of public reform and in the context of the pending rationalization of government’s planning and economic management functions, it’s only prudent to move the revenue administration function out of the Ministry of Finance.
To demonstrate its commitment, MinisterKonneh named a number of actions Government has taken including: the establishment of a functional Liberia Revenue Authority (LRA) formation office headed by Mrs. Elfreda Tamba; the establishment of a Steering Committee to oversee LRA formation process which includes the Governance Commission, the Ministries of Justice and Finance, the Legal Office of the President, the Law Reform Commission, assisted by the African Center for Economic Transformation, the International Monetary Fund and other institutions providing technical assistance to the process, and finalizing the draft law to establish the LRA.
The Finance Minister maintained that the establishment of a LRA is a herculean task and must not be over simplified. He noted that all the literature reviewed on establishing Revenue Authorities is full of cautionary tales that recognize the benefits of international best practices, but each country that chooses this policy direction must consider its own context and condition.
Minister Konneh informed the audience that they are currently concluding the draft law of what the revenue authority should contain. For his part ,Lofa County Sr. Senator Sumo Kupee,another panelist, said he supports an independent revenue authority.
He stated that his vision for a revenue authority is efficiency in taxation, equity through a broad tax base and, simplicity of a tax administration and compliance process. These would assist in consolidating the revenue generating capacity of government and instill fiscal discipline while enhancing the system of checks and balances.
Hon. Elfrieda StewartTamba, who is the Coordinator of the LRA, spoke of the need to deliver better services and to do it more effectively, efficiently and at a lower cost to citizens, as expenditure budgets decline. She indicated the need to adopt sound governance practices.
She further noted that there is also a need to address deficiencies in traditional procedures and structures that appear too rigid to respond to the rapidly changing needs of the public, and the challenges confronted by government in modern society, in addition to the pressure to adapt current business or private sector management practice to public sector institutions.
“The basic principle is such autonomy can lead to better performance by removing impediments to more effective and efficient management while maintaining appropriate accountability, flexibility, transparency and compliance with applicable public services laws,” said Hon. Tamba.
Enumerating problems of the revenue administration in Liberia, Mrs. Tamba named very poor remunerations of staff, integrity, international budget implementation, bureaucratic human resources management and inadequate funding.
On key challenges of the transition to a Revenue Authority, Mrs. Tamba outlined budgetary funding, resistance to detachment, politics, and misrepresentation of change and manpower skills.
On ingredients for success, Hon. Tamba named political commitment and support, stable leadership of the organization – both the Board and the Commissioners of the Authority, formal modernization program with an appropriate project management structure, modern project governance and a management framework, amongst others.
The Resident Representative of the International Monetary Fund (IMF), Dr. Yuri Sobolevalso made a presentation on,“The Legal, Regulatory and Social Environment Necessary for a Successful Revenue Authority.
He posed a series of questions that needed to be answered by the Liberian people before undertaking such a journey: Are the benefits and downsides of a Revenue Authority well understood? Is the government prepared to deal with possible labor relations upheaval in a move to a Revenue Authority?
Her Honor, Judge Eva Mappy Morgan, Chief Judge of the Commercial Court, wants an interpretation of the tax law on the differences between private and public ruling on tax laws because of an apparent ambiguity in the proposed law on the enforcement power of the revenue authority.
According to her, the draft law calls for autonomy of the authority and enforcement power of tax laws by the authority, but also names the Ministry of Justice and the Courts as having a similar power.
There was a general agreement among participants that that more debate is needed on the issue before going ahead with such important law because the proposals for the authority as presented by the panelists left more questions than answers.
The dialogue, the fifth in a series, is the Governance Commission’s efforts to create a platform for constructive and engaging discourse among high-level policy practitioners, academics, international partners, civil society and private sector leaders to inform public policy-making as well as discuss the prospects and challenges in establishing a successful Revenue Authority for Liberia.