6 May 2014

Liberia: Tipoteh Gives Panacea for Budget Shortfall

Dr. Togba-Nah Tipoteh, former Budget Advisor to President William R. Tolbert and former Minister of Planning and Economic Affairs has recommended a panacea for budget shortfall being experienced by the Liberian Government.

He said the government should take drastic steps in dealing with the issue of corruption that has undercut the budget.

Dr. Tipoteh said revenue shortfalls will always occur when there is "stealing of taxpayers' money, the use of taxpayers' money for personal purposes."

The seasoned Liberian economist and politician said the current situation is a non-starter, especially when members of the Legislators want US$73 million for the various districts, when funds already allocated for the districts were not used in the interest of the masses or the poor people in the districts.

Speaking to some members of the media over the weekend about his views on the budget shortfall, Dr. Tipoteh said the first measure is the President of Liberia to appoint national financial managers who understand the workings of the economy very well.

Tipoteh argued that with such an understanding, the financial managers will predict very well the expected contribution of economic actors to government revenue.

He said the Liberian senate should be well informed about how to confirm competent financial managers to facilitate the appropriate appointment of such managers by the President.

The renowned Liberian economist said the second measure is to know how many persons and businesses should be paying taxes. Dr. Tipoteh indicated that less than 5 per cent of owner-occupied houses that should be on the taxpaying list.

Furthermore, he indicated that most of the persons and businesses that should be paying real estate taxes contact the government, rather than the government contacting them, about how much they owe the government.

He added that one of three persons and businesses that pay real estate do not pay these taxes in the next year mainly because of GOL failure to keep checking on them and sending them reminders of their obligations.

The former University Professor of Economics believes that correcting these mistakes will raise revenue and reduce the shortfall.

The third measure outlined by the former Budget Boss, is related to the second issue because it has to do with the government ability to collect the appropriate taxes and issue businesses with proper receipts so that the taxes that the businesses pay can be accounted for.

Under the eyes of the government, the illegal attitude of businesses not issuing proper receipts takes place. Government entities are also engaged in this practice of giving receipts with no official records, thereby making it impossible to determine how much revenue is due the Central Government from these government entities.

Correcting these mistakes will raise revenue and reduce the shortfall, Dr. Tipoteh stated.

The fourth measure he noted is the promotion of good business practise on the part of the government, adding that "GOL is in the bad business practice of owing businesses, but running behind them for taxes.

Moreover, Dr. Tipoteh said government officials are seen harassing businesses for money and material things. With such bad practise by the government, businesses do not make as much taxable sales as possible and they also increase their prices, thereby bringing more hardships on the already suffering masses.


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