Dr. Samora P.Z. Wolokolie, Deputy Minister for Fiscal Affairs delivered this statement at the opening of the Draft National Budget hearings at the National Legislature, on behalf of the Hon. Samuel D. Tweah, Jr., Minister of Finance and Development Planning:
Mr. Chairman and members of the Honorable Joint Committee on Ways, Means, Finance and Development Planning
Other government officials of the executive and legislative branches of government present, members of the press, ladies and gentlemen.
I convey to you the Honorable Minister of Finance and Development Planning’s felicitation and warmest regards and seek your indulgence to allow me to present this opening statement in his behalf. Thank you very much for your indulgence, Mr. Chairman and members of the Honorable Joint Committee on Ways, Means, Finance and Development Planning.
We are pleased to present an overview of the revenue envelope of the FY 2020/21 budget covering the period July 1, 2020 to June 30, 2021.
- The total draft resource envelope for FY-2020/21 is a United States dollar equivalence of FIVE HUNDRED THIRTY-FIVE MILLION, FOUR HUNDRED FIFTY-TWO THOUSAND, ONE HUNDRED SEVENTY-THREE DOLLARS, FIVE CENTS. (US$535,452,173.05).
- This amount equates to Liberian dollars ONE HUNDRED THIRTEEN BILLION, EIGHT HUNDRED THIRTY-SEVEN MILLION, ONE HUNDRED THIRTY-ONE THOUSAND, NINE HUNDRED NINETY DOLLARS, SIX CENTS. (LRD113, 837,131,990.06)
- A projected annual average exchange rate of US$1: LRD212.6 set by the Central Bank of Liberia as at the time of the FY-20/21 budget preparation is being used.
- Actual revenue to be mobilized domestically is an equivalent of US$407.4 million or 76% of the total resource envelope while US$118 million or 24% constitutes external resources.
- Seventy percent of domestic revenue is projected in actual United States dollars totaling US$285.3 million dollars while actual Liberian Dollar projection is LRD25.9 billion dollars or United States dollar equivalent of US$122.1 million dollars.
- Projected revenue carry-forward is US$10.0 million which constitute 1.9% of the budget
Note however, that the entire budget is denominated in United States dollars therefore, the final budget figure is a United States dollar equivalence of US$535.4 million.
Domestic Revenue Mobilization by Economic Sector:
Revenue from the extractive sector including agriculture, forestry and mining is US$56.9 million broken down as follows:
- Mining _ US$39.7 million
- Agriculture _ US$13.1 million
- Forestry – US$4.1 million
Revenue forecast from other economic sectors include:
- The manufacturing sector US$23.7 million,
- Service sector – US$46.3 million
- Petroleum Trading sector – US$65.4 million
- General business (large importers of general merchandize of all kinds) – US$45.1 million
- Public corporations and State-Owned-Enterprises – US$20 million
- Sector ministries and agencies fees for service – US$11.9 million
- Small and Medium enterprises which include real properties, motor vehicles, importers of goods by individuals and small firms, etc – US$129.8 million
Tax kind perspective
From a tax kind perspective, domestic revenue forecast for tax revenue is US$333.5 million dollars broken-down as follows:
- Taxes on income & Profits – US$126.7 million
- Real Property Taxes – US$5.2 million
- axes on Goods and Services – US$38.6 million
- International Trade Taxes – US$158.2 million
- Other Taxes (Social Development Funds) – US$4.7 million
Non tax revenue forecast is us$73.8 million broken down as follows:
- SoE Budget Support – US$6.0 million
- Road Fund Levy – US$25.0 million
- Royalties and Rents – US$30.1 million
- Administrative fees, fines and other non-tax revenue – US$12.7 million
New Tax Policy and Revenue Measures
Also to be submitted along with the FY 20/21 budget document is a set of new tax policy measures to improve tax policy and administration. Key amendments would include an excise tax on petroleum, a one percent increment on GST, transitioning from Specific to Ad Valorem rate to relative to the CET Migration Plan for alcoholic beverages, among others, and other tax administration enhancing amendments to improve the Revenue Code. These amendments, Mr. Chairman, will be submitted in the next couple of days.
Revenue from external resources which constitutes grants and borrowings is US$118 million broken down as follows:
- Grants US$47.5 million
- Loans – US$70.5 million (please reference details in document)
Carry forward is projected at US$10 million based on the revenue and spending information as at the time of the budget preparation which is likely to be a plus or minus once the ongoing reconciliation is ended by September 30th.
Mr. Chairman and distinguished honorable members of this Committee, we thank you for the opportunity and look forward to a healthy deliberation.