The NEWS (Monrovia)
27 November 2008
Monrovia — Lack of annual stock-taking and the preservation of important documents such as revenue flag receipts as well as tax credits ledger led to US$28.1 million over due taxes, audit report released by the General Auditing Commission (GAC) reveals.
The Commission admits that although there were improvements in the collection of revenues in the last fiscal year 2006/2007, however, the lack of essential documentations suggests that the above figure could be more.
The report strongly recommended that effective systems and controls be put into place for the prevention and detection of fraud, error and non-compliance with the Executive Laws, the Revenue Code, and any relevant regulations.
The report indicated that documentation was not fully available as the Ministry of Finance has not been audited for over 25 years. It stressed the importance of maintaining all current documentations or risks losing millions in revenues.
On the issue of maintaining important documentation, the audit report said in the absence of the Board of Tax Appeals, delinquent tax payers may be able to evade the payment of taxes because there is no administrative or legal mechanism to dispense tax matters.
"Furthermore, in the absence of the Board of Tax Appeal and the Tax court, the Minister uses his/her discretion which may lead to abuse, and abuse may lead to corruption and delinquent taxpayers may not get fair judgments if the Minister makes a wrong decision," the GAC recommended.
The Commission called on the Government to constitute the Board of Tax Appeals to serve as the highest administrative tax settlement forum for the resolution of tax issues between the government and tax payers.
The report also revealed loss of revenues by State Owned Enterprises due to non-submission of financial reports which makes it difficult to project the dividends to be received by the Government of Liberia.
It said financial regulations should be developed and reporting requirements for State Owned Enterprises (SOEs) be done quarterly and annually.
The audit report further indicated that revenue collections from the Ministries and Agencies totaling US$6,954,962.69 for 2005/2006 and US$4,034,840.00 for 2006/2007 was not verified because auditors did not obtain all documents.
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It is good to hear that after all these many years of a disfunctional financial reporting system that finally the Liberian government has an auditing process that can work independently to show the actual picture (weaknesses) of public finances. This is a major tool to instill the necessary reforms that are long overdue in Liberia's fiscal policy formulation process. I hope the auditing bureau sees its role as an independent body that can work with public institutions to bring about the structural changes that are needed. BRAVO to all involved.