GST: Youíll Never Walk Alone!
The Goods and Services Tax otherwise known as the (GST) kicked off Saturday, January 1st, 2010 as promised by President Ernest Bai Koroma; but not without raising a whirlwind of controversy across the country.
It can be easily recalled that the GST was supposed to have been operational beginning September 1st, 2009. But due to widespread confusion and doubt about the real essence of the GST, added to the general belief (or unbelief) that proper and indepth sensitization on the merits and demerits of the GST was still a distant dream; the September 2009 date for its actualization was deferred to January 1st, 2010.
The reason given for the postponement according to the National Revenue Authority (NRA), who is the initiator of the GST, was for taxpayers, consumers and the general public to be better informed and equipped on this new phenomenon, so that come January 1st, 2010, compliance to payment of the GST would be as smooth as drinking milk.
A random vox populi conducted by this writer yesterday, revealed among other things, that a good number of people (taxpayers and consumers) are still ignorant of what the GST is all about, and would feign comply even at risk of arrest!
In summary of what was gathered yesterday from Sani Abacha Street traders, journalists, shop owners, hoteliers, restaurateurs, and from other business owners across Freetown, most of them were of the opinion that the country and its people are not yet economically stable, viable or ready to comply with the demands of the GST.
In their general opinion, they also felt that adequate education on the GST is still nothing to write home about. They opined that what the government should have done to make it easier on the people, was to have started the GST with a very minimal charge like 5% instead of the 15% business owners are now expected to charge consumers for goods and services for onward payment to the NRA.
The introduction of the GST sounds like a novel idea and one that can mean only well for a developing country like ours. According to NRA sources, ďthe GST replaces seven (7) existing taxes Ė Import Tax, Domestic Sales Tax, Entertainment Tax, Restaurant and Food Tax, Messages Tax, Hotel Accommodation Tax and Professional Services Tax.Ē
According to the NRA, what this means is: the introduction of the GST ďwould simplify and streamline the present system of indirect taxation and reduce the cost of administration for the government, the National Revenue Authority (NRA) and businesses.Ē
However, the only snag in the whole idea according to the different shades of opinions is that it would seem that the burden of this new phenomenon is squarely on the shoulders of the ordinary consumers who are in the majority; and they (consumers), are very unhappy for this.
In A Typical GST Transaction as explained in NRA Public Information booklet No. 001, issue 15 June 2009, it is noted that: ďFinally, the retailer sells the television to a consumer and applies his markup of Le50,000 making the price Le550,000 to which fifteen percent GST (Le82,000) must be added. The tax Ďsticksí with the consumer Ė so the consumer actually pays a total Le632,000 GST inclusive price and bears the full cost of Le82,000 of GST.Ē This is the part that has angered many ordinary people!
But to cushion the effects of the above taxation on the ordinary consumer, the NRA in this same booklet says: ďHowever, since all the registered traders involved in the sale have been able to reclaim the GST they incurred on the television, there is no cascading tax effect on the consumer who does not pay a tax on a tax, as happens with some other forms of consumption taxes.Ē
It would therefore be more than expedient for the NRA to better educate the masses on this new phenomenon if it hopes to succeed, because as the saying goes: information is power and no man can afford to walk alone; and equally so as to be fore-warned is to be fore-armed.¬†
¬© Copyright by Awareness Times
Newspaper in Freetown, Sierra Leone.