CBL, LRA Deny Missing Revenue Story -But More Questions Left Unanswered

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In the wake of media reports that the Liberia Revenue Authority (LRA) Internal Audit on August 26, 2020 allegedly wrote LRA Commissioner General Thomas Doe Nah that it had discovered from investigations that tax revenues from Government’s Consolidated General Revenue Account (CGRA) amounting to $25 million and LD2 billion were not captured and reflected in the 2017, 2018 and 2019 CBL swift confirmation reports and in GOL’s CGRA; and therefore recommended that the CBL and commercial banks provide explanations for these irregularities, the Central Bank of Liberia says taxes never went missing from the Government of Liberia’s Consolidated Account at the Bank.

According to a Monday, November 16, 2020 press release, the CBL clarified to the general public that it is not a signatory to the procedural channels regarding the movement of GOL’s revenue from commercial banks account to the consolidated revenue account, but only implements the movement of funds from the accounts based on directive from the Ministry of Finance and Development Planning (MFDP).

“All taxes mobilized by the Liberia Revenue Authority (LRA) are paid into the transitory accounts at commercial banks consistent with the Public Financial Management (PFM) Law, and eventually moved into the Government’s Consolidated Account held at the CBL, exclusively under the transparent and accountable mandate of the MFDP and LRA. Transitory accounts are issues for LRA and commercial banks,” the CBL stated.

The CBL further clarified that at the end of every reconciliatory period, and in support of proper accountability, a routine validation is done between the LRA and the commercial banks (excluding the CBL) to confirm that all funds collected and placed in the transitory accounts  are appropriately handled in line with policy. “The CBL neither participates in the setting of revenue targets, nor has any jurisdiction or knowledge about the actual amount received by commercial banks prior to any movement of funds into GOL’s accounts.”

The Central Bank therefore reiterated to the general public that it has no statutory control over the operational functioning of GOL’s transitory accounts at the commercial banks, nor does it have any control over the movement of cash from the Consolidated Account of the Government unless by a formalized instruction from MFDP.

“The CBL reassures the public of its full commitment to transparency in the implementation of monetary policy operations to strengthen confidence. In accordance with the Freedom of Information Act the CBL remains available in providing necessary clarifications and accurate information on issues of concern to its operations,” the CBL press release said.

Meanwhile, the LRA in reaction to the media reports about the 2017, 2018 and 2019 tax revenues not reportedly reflected in the Government’s CGRA, said on Monday, November 16, 2020 that it is dismayed by reports quoting a purported LRA Internal Audit report sent to the Commissioner General of the LRA.

“We do not know where you acquired this memorandum, but from our review, the memo was doctored and is not an authentic document of the Liberia Revenue Authority,” the LRA acting Chief Counsel Gabriel Johnson wrote one of the media outlets that carried the story.

“We are disappointed and feel injured by the report which has the tendency to mislead the public and undermine our role as the principal collector of taxes and administer of the Revenue Code. We encourage media outlets to verify or authenticate sources of information or documents purporting to be products of the LRA.

Pundits believe that the CBL press release, which failed to outrightly deny contents of the purported LRA memo on the Internal Audit of Direct Transfer Payments at Commercial Banks, but deflected blame back to the LRA and Commercial Banks about the memo’s request for the CBL and Commercial Banks to provide answers to as how and why the aforementioned $25m and LD2 b taxes were not reflected in Government’s Consolidated General Revenue Account, falls short of addressing the core issue of why didn’t the bank reflect the collected taxes in their confirmation reports for the period under review.

“By stating that they neither participated in the setting of revenue target, nor did they have any jurisdiction or knowledge about the actual amount received by commercial banks prior to any movement of funds into GOL’s accounts, the Central Bank is now striving to distance itself from whatever might have occurred regarding the movement of funds from Government’s Consolidated General Revenue Account. But how can the CBL free itself from these transactions when the LRA is saying investigations show that the CBL never recorded in their books those revenue transfers from the commercial banks?” pondered a renowned Liberian financial expert resident in the United States of America.

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