As the presentation of the 2016 Budget coincides with the official end of the ebola scourge in the country, Minister of Finance and Economic Development, Kaifala Marah has called on Sierra Leoneans to join hands in support of the implementation of this year’s budget.
He made the call as he delivered the Government Budget and Statement of Economic and Financial Policies for the financial year 2016 in jam-packed Well of Parliament last Friday, 6th November 2015.
Under the theme: “Strengthening Resilience and Building a Diversified Economy”, Minister Marah outlined series of fiscal policy measures which are neatly aligned with strengthening the resilience in the country’s social sector and at the same time diversifying the economy as the theme suggests.
Minister Marah projected domestic revenue to rise to Le 2.56 trillion which is 10.4 percent of GDP compared to 9.8 percent of GDP in 2015, and that corporate taxes are projected at Le 259 billion about 1.1 percent of GDP due to projected improvement in business enterprises. He also forecasted personal income tax at Le 653 billion about 2.7 percent of GDP and goods and services tax (GST) projected to grow “significantly” to Le 635.2 billion or 2.6 percent of GDP, while domestic GST will contribute Le 269.9 billion and import GST accruing Le 365.1 billion.
The Minister further highlighted that customs and excise duties in the year under forecast will amount to Le 694.6 billion or 2.8 percent of GDP, of which import duties will contribute Le 370 billion and excise duty on petroleum products generating Le 303.6 billion while other excise duties will contribute Le 19.9 billion.
Revenue from mining royalties and licenses Dr. Marah went on to indicate, will generate Le 76.4 billion, while non-tax revenues collected by various government departments are projected raise Le 119.3 billion, of which royalties and licenses from fisheries will amount to Le 43.6 billion and dividends from parastatals amounting to Le 10.0 billion while the road user and vehicle licenses projected to contribute Le 113.5 billion. Total grants according to the Finance and Economic Development Minister, are expected to total Le 418 billion or 1.7 percent of GDP and project grants amounting to Le 380 billion or 1.5 percent of GDP.
In the face of these revenue projections, all is not expected to be rosy as other fiscal measures were postulated aimed at raising additional revenues as encapsulated in the 2016 Finance Bill. These measures include: that Ministries, Departments and Agencies (MDAs) will now have to make provision for import duty in their budgets for all contracts subject to taxes. “As required by law, all duty and tax waivers and exemptions, including waivers for petroleum products, will require prior approval of Parliament.” And that duty concessions to NGOs, tourism sector and road construction companies will be strictly reviewed, while PAYE marginal tax rate will increase by 5 percent (from 30% to 35%) to make the tax system more progressive. This will however affect only those earning monthly incomes above Le 2 million.
The Minister stated that wages and salaries are increased by 6.7 percent of GDP from Le 1.60 trillion in 2015 (7.2% of GDP) to Le 1.65 trillion (6.7% of GDP). The budget asserts that salary grants for Mayors and Chairpersons of councils and sitting fees and transportation allowances of councilors have been reviewed upwards to now reflect Mayors and Chairpersons receiving Le 2, 100, 000 monthly while sitting fees and transport allowances for councilors have increased from Le 350, 000 to Le 830, 000 and deputies to Mayors Chairpersons will receive Le 2, 000, 000 an increase from Le 400, 000.
Describing the new financial year as “the epic journey of recovery” Minister Marah encouraged his compatriots to each carry as arsenal of new instruments for public service delivery defined by efficiency and patriotism, with the realization that each generation has a responsibility to carry the succeeding ones shoulder high so they can far into the horizon than on whose shoulders they sit.
The budget presentation was witnessed by children representatives from across the country, a feat that was achieved by the 2016 budget which is first in the history of budget processes in Sierra Leone
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