The New Dawn (Monrovia)

3 December 2012

Liberia: Government's Revenue Declining?

Information available to this paper shows a drop in Government's Revenue collection, with fears that most of the projects that were earmarked in the much trumpeted 2012/13 budget could suffer severe setbacks.

Officials at the Ministry of Finance, two weeks ago put together a taskforce to investigate the situation and come up with a clear cut strategy on the shortfall in the revenue collection, this paper learned.

The ministry's Deputy Minister for Revenue, Dr. James Kollie, who confirmed in an interview with this paper last week that his outfit had put together a taskforce to investigate the poor performance, said the shortfall was only affecting certain sectors or envelops in the budget due to some external factors, but that there has been over performance in some areas, suggesting that these figures do make up for the drops elsewhere.

Dr. Kollie, who appeared very defensive, conceded that the Toe Town collectorate, and all of the frontline counties bordering Ivory Coast have witnessed a serious drop in revenue collection, while Mittal Steel's taxes to government has dropped more than half, due to a drop in the global price for iron ore.

He said out of the US$3.8 million expected from Mittal Steel during the first quarter of the budget, the company made a payment of US$1.7m due to the drop in the price of Iron ore on the global market. He said government's expected revenue from Mittal Steel fell further during the second quarter as instead of a projected 1.8m, government received US$700, 000.

Other areas are traffic diversions. For instance, the United States Agency for International Development or USAID has a fixed amount Revenue agreement with the Government of Liberia, allowing the government to spend certain amount on its projects, which it repays the latter.

Dr. Kollie said during the period under discussion, US6m was spent in the Health sector and that the government expected a reimbursement of US4.4m for the quarter under review, but instead, USAID remitted only US$900, 000 out of the US4.4m as at the time of this interview.

However, Dr. Kollie said despite the poor performance in some sectors, Government revenue appears to be on target and may record a little increase over the period.

He said compared to this time (November 26 date of the interview) last year, government generated US171m as at November 30, the current administration, he said had collected US173m as at November 24, suggesting an increase of 2m over the same period.

Dr. Kollie said the actual revenue projection from July 2012 to December 2012 is US$225m, adding that government is expected to exceed this amount due to the favourable signs.

However, efence came in contrast with a local daily publication two days later. The paper reported that 95% of the government ministries and agencies were yet to begin the implementations of their programs as spelled out in this year's long term budget.

According to the paper's finding, most of the government ministries and agencies had suspended their programs because payment on their requests for funds were still being stalled at the ministry of finance, allegedly due to the lack of money.

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