The Commissioner General of the National Revenue Authority- NRA has dispelled certain misconceptions about the Electronic Cash Register- ECR in a Press Conference held on Tuesday 22nd February 2022 with the Media and Civil Society Organizations to help report the correct information about systems deployed by the NRA to businesses.
As part of its revenue enhancement reforms, the NRA has in the last four years largely focused on overhauling its aging manual system to a contemporary digitally advanced arrangement. The introduction of the Electronic Cash Register is one of the results of this effort. The enactment of the ECR Regulations in 2020 gave rise to the installation and enforcement of the ECR Machine across all registered businesses for Goods and Services Tax (GST). According to Dr. Samuel Jibao, the ECR Machine is a mere calculator aiding the issuance of receipts. The ECR Regulations of 2020 mandates all GST registered businesses to issue receipts from the Cash Register issued by the NRA. It could be recalled that just a little over two years ago, the threshold for GST businesses was Le 350 million. The 2022 Finance Act reduced the threshold to a Le 100 million, which means businesses which main focus is the provision of goods and services with an overall turnover of Le 100 million are qualified to pay GST. This means the Machine is not for everybody and GST is not on every commodity. "This is what the law says, and the job of the NRA is to implement the law as it is" said Dr. Samuel Jibao.
He noted that the GST tax was introduced in 2009 and is not a new tax as alleged by many self-proclaimed social media apologists. "My administration is merely focusing on the automation of that process, continued Dr. Jibao. He said even though the institution has had a lot of engagements with the business community, Dr. Jibao said he is disturbed by some of the misconceptions he has had to deal with in the last one month concerning the Machine.
-the use of the ECR Machine is a new tax
That the burden of GST lies on business owners which is not the case
That the Commissioner General's visit to business premises was to close down businesses whereas the visit was geared towards verification and installation.
-The misunderstanding of input GST as double taxation
-That the Machine is targeting Micro Businesses- there is a different regime for micro businesses.
That GST is on all Commodities which is not the case, GST is not charged on rice, flour, baby food, pharmaceuticals etc.
-That there is a 15% automatic increase on all goods and services if receipts are issued on the Machine
One very key among the misconceptions is that the hike in prices was as a result of high taxation. The Commissioner General outlined some of the steps taken by Government to keep prices within the range of the ordinary man. The removal of import duty on rice, flour, and oil. The reduction of taxes on essential commodities like Cement from 20% to 10%, iron rod from 10% to 5% and 5% on cooking gas to 0% Dr. Jibao said Government is losing billions of leones every year because of these reductions. "Things are the way they are because of the global corona pandemic which has disrupted the global supply chain". He said the effects of corona is a global challenge and is not peculiar to Sierra Leone. "Countries in the West are facing some of the worse economic downturn after the 2008 global economic crunch" he lamented.
Dr. Jibao called on the media and Civil Society to help spread the word to Business people especially in Freetown to cooperate with the NRA in the implementation of the Electronic Cash Register. He concluded by saying he can't allow low-income earners despite their meagre salary to pay their taxes every month and allow people who are involved in economic activities to not pay taxes. He said the NRA will make sure that everyone pays their fair share of the taxes in the Country.
Public Affairs and Tax Education Unit
National Revenue Authority
5 Gloucester Street, Freetown
Call Center 839 Orange and Africell