Monrovia — Dr. Henrique Tokpah, the chair of the Senate Autonomous Agencies Committee, has revealed disturbing findings regarding the handling of taxes collected by the Liberia Revenue Authority for the National Road Fund.
An investigation conducted by the committee established that since 2018, the LRA has collected a staggering amount of US$116 million in taxes levied on petroleum.
Out of this total, only US$80 million was remitted into the consolidated account, as stipulated by the Road Fund Act, to be used by the National Road Fund Authority for road projects across the country. The whereabouts of the remaining US$27 million raised concerns among lawmakers, leading Senator Abraham Darius Dillon last Friday, June 9, to question the head of the Road Fund, Mrs. Joseta Neufville Wento, during the committee hearing.
Mrs. Wento explained that the missing amount was utilized as part of a budget recast process initiated by the government of Liberia. She further elaborated that the Finance Minister and the LRA, who oversee the Road Fund Authority, made decisions regarding the allocation of funds. Consequently, meeting financial obligations to contractors became challenging, resulting in delayed payments.
The investigation also unveiled an alarming misuse of the Road Fund, as Finance Minister Samuel Tweah disclosed in 2022 that funds from the Road Fund were diverted to pay salaries. Although some members of the public and legislature deemed this action a violation of the Act creating the National Road Fund, the Senate investigative report and the House of Representatives Public Account Committee report confirmed Minister Tweah's assertion. Both reports indicated that the Legislature re-appropriated the funds, a decision supported by the National Budget fiscal outturns.
During the 2019/2020 Budget deliberations, the Senate and the House reduced the Road Fund's allotment from US$29 million to US$22.3 million, resulting in a variance of US$7 million. The General Auditing Commission deemed this sum owed to the Road Fund. The Senate Public Account Committee clarified that this variance was re-appropriated by the Legislature during 2019/2020 Recast Budget to address critical national issues arising from the COVID-19 pandemic. The Minister of Finance consulted and received approval from the Legislature during the recast budget process.
The Senate Public Account Committee urged future audits of the Road Fund to comprehensively document final budgetary appropriations made by the Legislature. They also recommended that the Road Fund Steering Committee, which includes the Ministry of Finance, review and approve responses to audit queries from the Auditor General to ensure transparency and accountability.
Furthermore, the Senate inquiry revealed that CONEX Petroleum Group Inc., as per a notarized agreement with the government in 2018, has failed to fulfill its obligation of remitting the full amount collected under the road fund arrangement. Although CONEX agreed to deposit US$6,967,270.45 into the government account, the company has fallen behind in payments, as confirmed by the senate investigation.
In response to an FPA inquiry, Mr. T. Nelson Williams, head of CONEX Liberia, stated that Conex has already paid over US$3 million of the arrears and remains committed to making ongoing payments to settle the remaining balance.
Mr. Williams emphasized that Conex has made substantial progress in addressing the arrears, stating, "Please note that in terms of proportionate/percentage basis, I believe Conex has made the highest amount of payments." He further highlighted that Conex is actively fulfilling its financial obligations by making regular weekly payments towards the Road Fund account, which is under the supervision of the LRA (Liberia Revenue Authority).
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In similar vein, SRIMEX Oil and Gas Company, owned by Mr. Musa Bility, recently faced allegations of tax evasion, resulting in its shutdown last Wednesday. Enforcers from the LRA ordered the closure of Bility's Srimex storage facilities at the Liberia Petroleum Refinery Company (LPRC) and the Star-Base on the afternoon of May 7, 2023, at the Petroleum Service Terminal (PST).
The team of LRA tax enforcers also proceeded to shut down three additional large shortage facilities of Srimex at the Star-Base, as reported.
They were, however, reopened on Thursday after the company and the LRA reached an agreement on the settlement.
