MONROVIA – Platform for Dialogue and Peace in partnership with the Norwegian Institute for International Affairs has held a one day seminar in Monrovia on “Strengthening Fragile States Through Taxation” (FRAGTAX), with participants calling for an increased awareness on taxation in Liberia. The seminar was attended by several national and international participants from Liberia, Norway, Tanzania, and Mali, representing relevant government ministries and agencies, academia, civil society, and community-based property developer agencies from Montserrado and Margibi Counties. The seminar was held at a local hotel on Wednesday, September 28, 2022.
Speaking at the opening of the seminar, the principal investigator, Prof. Morten Bøås of the Norwegian Institute for International Affairs, said state-building is contingent on predictable income which, according to him, is based on domestic taxation. Prof. Bøås stressed that in the absence of a self-sustaining domestic revenue base, the state is unable to provide adequate public services for its citizenry, emphasizing that domestic revenue is critical to state-building. He admonished state revenue authorities to ensure effective operational procedures and processes for domestic taxation in order to generate reliable and uninterrupted national revenue for state-building.
Prof. Bøås opined that citizens in most fragile countries remain in the dark concerning how political rule in those states work, and under what circumstances other actors inside or outside the state, undermine or challenge the tax administration of the state. This, according to him, has led to the fundamental question of why some countries succeed in building functional tax regimes and others not. He noted that state-building and taxation cannot properly be studied without making inquiries into conditions of ‘political authority’, which forms the basis of ‘Strengthening Fragile States Through Taxation’. In this context, FRAGTAX has selected Liberia, Mali, and Tanzania which exist at varying forms of political authority over fiscal capacity and taxation to explain variations in why some states are more successful in building functional tax regimes than others.
For his part, Prof. Odd-Helge Fjeldstad, who spoke on Taxation in Africa, emphasized that the establishment of tax regimes and state-building efforts are closely connected as taxation may create a social contract between the government and taxpayers, stressing that economic growth and improvement in public administration are driven by robust fiscal institutions to support state-building.
Also making a presentation was Mr. Abdoul Wakhad Cisse of a research institute in Mali. Mr. Cisse narrated how several measures were adopted in previous years by the Malian Government in modernizing its tax system thereby making it more effective and efficient. He named professional ethics for tax administration which entailed adopting a code of ethics, strengthening communication mechanisms dedicated to an efficient tax administration; providing quality services that meet the needs and expectations of taxpayers, in particular through opening of a reception and assistance office for taxpayers; providing administrative and operational services with adequate resources; and improved information management system and services for taxpayers.
For Tanzania, Dr. Lusekelo Kasongwa of the Mzumbe University, traced the efficiency of tax administration in Tanzania to a number of reforms, some of which entailed reduction in tax rates on individual and corporate income as well as introduction of value added tax (VAT).
Presenting findings of a recent pilot study on taxation, Mr. James Shilue, Executive Director of Platform for Dialogue and Peace, said his organization in August this year conducted a study on the present Local Government Tax Administration Pilot in Margibi County with the aim of understanding citizens’ perception of taxation including their ‘receptiveness’ of the 50-50 tax revenue sharing pilot project. Mr. Shilue disclosed that the study also sought to generate preliminary data for an upcoming nationwide study in Liberia.
According to him, the findings, among others, showed that although noticeable efforts have been made in strengthening the institutional capacity of the Liberia Revenue Authority, collecting real property tax in Liberia still remains a critical challenge for the Government due to negative perception of citizens in relation to the management of the County Social Development Funds (CSDP). Mr. Shilue also said the findings identified lack of a comprehensive database on property locations, ownership, and values of properties which have not only made compliance difficult but have also made a large number of properties in Margibi County to be outside of the official tax base. He stressed that only a handful of respondents admitted to paying taxes.
Commenting on the findings, Mr. James Jaber, Assistant Commissioner for Real Estate at the Liberia Revenue Authority, welcomed the findings and said his organization would review and implement the findings where applicable. Mr. Jaber reiterated that taxation is key to statebuilding and pointed out that the Revenue Tax Code of Liberia requires compliance from all eligible taxpayers. He also noted that the Margibi County pilot has shown the need to incentivise people to register their properties in order to pay tax as his institution has thus far captured about 12,000 properties in 3 months, although there are still many properties to be registered.
Earlier, Montserrado County Superintendent, Mrs. Florence Brandy, welcomed the participants and said she was motivated by the efforts of the organizers in conducting a seminar that emphasized state building, taxation, fragility and development. She said the event was timely as the Government of Liberia has started exploring ways of mobilizing domestic resources to promote development at the local level. She believed that the seminar would help stakeholders to tackle some complex issues that involve taxation so as to foster participation and fiscal decentralization.
P4DP is a leading Liberian non-governmental organization (NGO) dedicated to research and participatory action activities aimed at strengthening the capacities of State and Non-State Actors to prevent, manage, and transform conflict through collaborative action. In collaboration with national and international partners, P4DP has over the years supported the development agenda of the Government of Liberia (GOL) as espoused by the Pro Poor Agenda for Prosperity and Development (PADP) by working with relevant line ministries and agencies of Government, communities and local leaders to build customized local and national partnerships that meet the country’s increasing need for research, peacebuilding, social cohesion and development.
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