Members of Parliament yesterday enacted the Finance Act, 2016 which provides for the imposition and alteration of taxes, duties and excise and other related matters.
Section 37 of the Act provides for the elimination of price subsidies for fuel, with the government expected to apply the existing commercial fuel price regime to the retail pump price to ensure a full pass-through from international prices, exchange rate movements and other inherent costs in the petroleum formula.
Members stated that the issue of eliminating subsidies was not in the first place brought to Parliament for ratification and questioned as to why the Minister of Finance brought it to them for elimination.
It could be recalled that in late January, 2016 reports revealed that the country was losing revenue in the petroleum pricing to the tune of 150.81 billion and Le133.35 billion in 2014 and 2015 respectively.
Minister of Finance and Economic Development, Dr. Kaifala Marah, however explained that they would take into consideration the views of parliamentarians, adding that some amendments would be made and brought to them for their considerations.
On the issue of increase in taxes, he said, the increment would only affect people holding executive positions and other top level earners, adding that it would not affect low income earners in the country.
He said out of 19,000 teachers in the country, only 620 would be affected, while just 220 out of 290 consultants would be affected by the new tax rates.
He said government was trying to strengthen the revenue sector so that the country would hit 20% of its Gross Domestic Product.
Minority Leader of Parliament, Hon. Dr. Bernadette Lahai, described the Finance Act as ‘fair’ as it showed how budget allocations were assigned to ministries, departments and agencies and how revenues would be generated.
“On the issue of tax increment, there should be specification as to who will be beneficiaries, being that most of us have certain resources that those down there could not afford. If such increment is made, clear indications must be made. We should consider it well as we are not in the same position as the low income earners,” she said.