November 9, 2015 By Jariatu S. Bangura
Minister of Fiancé and Economic Development has called on sierra Leoneans to develop an approach to provide a greater resilience towards the economy of the country as the 2016 budget would be delivered on huge expectations by everyone.
Speaking to Members of Parliament last Friday (November 6), Dr. Kaifala Marah said huge resources were required to harmonize and service the country’s external debt as the government was in arrears of its contributions and subscriptions to international organizations.
He said despite the recent efforts to harmonize the arrears, the remaining was high as it amounted to $48.9millionm of which $23million was owed to Tier 1 organizations, including the African Development Bank, Islamic Development Bank and the World bank, while $25million was owed to Tier 2 organizations, including the Commonwealth Foundation and the International Fund for Agricultural Development.
Given that expected recovery, Dr. Marah noted that domestic revenue was projected to improve to 10% of GDP in 2017 and further to 11% of GDP in 2018, and that total expenditure and net lending was projected to decline to 19% of GDP in 2016 with an average of 17.7% of GDP in 2107 and 2018 when fiscal consolidation would take effect.
He explained that government would implement a mix of fiscal, monetary and exchange rate debt policies to achieve the 2016 macroeconomic objectives.
“Key objective of fiscal policy in 2016 will ensure fiscal sustainability through enhanced domestic revenue mobilization and expenditure rationalization to maintain macroeconomic stability and lay the foundation for sustainable economic growth and poverty reduction,” he said but however observed that the 2016 revenue performance maybe undermined if the crisis in the iron ore sector continues.
The Finance Minister stated that the Bank of Sierra Leone remains committed, through the proactive monetary policy management to deliver inflation at the targeted level of 9.5 percent at the end of 2016.
“In this regard, interventions in the foreign exchange market will be limited to smoothening short-term volatility in their exchange. In addition to the tax policy measures proposed above, NRA will continue to strengthen the implementation of measures to curb fraud and tax evasion in 2016,” he noted.
He said government would require all registered GST vendors to use electronic cash registers as it would interface with online tax system and allow real time capture of transactions to enhance GST compliance, as well as reduce under-declarations.
To further enhance GST compliance, Dr. Marah said a penalty of Le 5million will be levied on each unauthorized receipt issued by a GST registered business other than that provided or certified by the National Revenue Authority.