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Published on 2024-04-11 00:40:00
Integrity Watch Liberia (IWL) has recently highlighted the significant impact that tax incentives have on attracting both domestic and foreign investment, particularly within the extractive industry. Their findings revealed that Liberia faced a loss of US$250.3 million in tax incentives between 2015 and 2016 in the quarry industry, which involves the extraction of sand, rocks, and other minerals. This research was presented to the African Parliamentary Network on Illicit Financial Flows and Taxation (APNIFFT) on Capitol Hill on April 10, 2024.
The Executive Director of IWL, Mr. Harold Aidoo, emphasized the importance of tax incentives in stimulating investments in the extractive industry. He pointed out that the latest research conducted by IWL focused on the sand mining and quarrying sector, shedding light on the financial landscape and operational scales within the industry. The report highlighted the revenue fluctuations in companies like Z&C Rock Crusher, showcasing their market impact and operational efficiency.
The study also analyzed revenue trends in sand mining and quarrying activities in Montserrado and Margibi counties from 2020 to 2023. Despite initial increases in revenue from 2020 to 2021, followed by slight declines in 2022, there was a subsequent increase in revenue in 2023. Aidoo acknowledged that while tax incentives have the potential to stimulate economic growth and revenue mobilization, there is ongoing debate about their effectiveness in achieving these objectives.
The tax incentives, averaging about 30% of revenue and 6% of GDP annually, represent untapped potential for supporting national policy agendas. Aidoo stressed the importance of a balanced approach to tax incentives that promotes investment, safeguards fiscal interests, and ensures equitable distribution of benefits among stakeholders. Senator Francis Dopoh of River Gee County expressed gratitude for IWL’s research findings and pledged to consider the report in ongoing discussions about tax incentives.
Overall, IWL’s research underscores the significance of tax incentives in driving investment in the extractive industry and the importance of a balanced approach to maximize their benefits. The study provides valuable insights into revenue trends and market dynamics within the sand mining and quarrying sector, highlighting the need for effective policy measures to optimize the utilization of tax incentives for sustainable economic growth and revenue generation in Liberia.
Read the original article on The Newdawn Liberia
