Finance Act 2024 Triggers Public Concerns

Sierra Leone’s President, Dr. Julius Maada Bio, has officially enacted the Finance Act 2024 into law, following its ratification by Parliament in November. While the Act aims to enhance revenue mobilization and promote economic growth, its impact on citizens has raised significant concerns.

The Finance Act 2024 introduces a series of fiscal adjustments and new taxes, including a notable 5% import duty tax on rice, scheduled to commence in January 2024 and escalate to 10% by January 2025. This measure, affecting a staple in Sierra Leonean households, has sparked worry among the populace.

A critical provision in the Act involves reducing the Minimum Alternate Tax (MAT) rate from 3% to 2%, with adjustments to its applicability. Additionally, the Act introduces an income tax targeting digital products and services from global tech giants like Google, Meta, and Amazon, impacting Sierra Leonean consumers.

The Withholding Tax rates see adjustments in Dividends, Management and Professional Fees, Rent, and Lottery Winnings, all set at a standardized rate of 15%. Furthermore, a new 1% Education Levy has been introduced to support educational initiatives.

The Act harmonizes Excise Duty rates for both domestic and import sectors, introducing Excise Duty on petroleum and plastic products. Notably, a 5% Excise Duty on gambling, betting, and lottery activities is introduced.

Other notable provisions include Stamp Duty adjustments, multiple rates applicable to property transactions, and the raising of the Goods and Services Tax registration threshold from SLE 100,000 to SLE 500,000 to provide relief to smaller businesses. The Finance Act 2024 also reintroduces GST exemption for plant and machinery in the agriculture, manufacturing, mining, and petroleum sectors.

As news of the Finance Act 2024 unfolded, citizens began expressing concerns about its potential negative effects on their daily lives and economic well-being. Increased taxes on essential goods and services, coupled with amendments to income tax rates, have raised fears of strained household budgets and reduced take-home pay for the working population.

Business owners, particularly in the small and medium-sized enterprise sector, worry about increased corporate tax rates and the broader economic challenges that may threaten their growth and sustainability.

Critics argue that the Finance Act lacks adequate provisions to protect vulnerable segments of the population, including the poor and elderly. This has prompted calls from civil society organizations and advocacy groups for a comprehensive review of the Act, urging a more inclusive and consultative approach in shaping fiscal policies to safeguard the interests and well-being of all citizens.

As Sierra Leoneans grapple with the unfolding implications of the Finance Act 2024, a crucial dialogue between the government and its citizens is emphasized. Balancing economic sustainability with the welfare of the people becomes pivotal in fostering a fair and equitable fiscal environment for the nation.