Identifier
Created
Classification
Origin
08MONROVIA647
2008-08-19 08:39:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Monrovia
Cable title:  

LIBERIA: PRESIDENT WAIVES TAXES FOR LOW-SALARIED WORKERS

Tags:  EFIN ECON PGOV LI 
pdf how-to read a cable
VZCZCXRO3704
RR RUEHMA RUEHPA
DE RUEHMV #0647 2320839
ZNR UUUUU ZZH
R 190839Z AUG 08
FM AMEMBASSY MONROVIA
TO RUEHC/SECSTATE WASHDC 0297
INFO RUEHZK/ECOWAS COLLECTIVE
UNCLAS MONROVIA 000647 

SENSITIVE
SIPDIS

DEPARTMENT FOR AF/W

E.O. 12598: N/A
TAGS: EFIN ECON PGOV LI
SUBJECT: LIBERIA: PRESIDENT WAIVES TAXES FOR LOW-SALARIED WORKERS

REF A) MONROVIA 629 REF B) MONROVIA 608


UNCLAS MONROVIA 000647

SENSITIVE
SIPDIS

DEPARTMENT FOR AF/W

E.O. 12598: N/A
TAGS: EFIN ECON PGOV LI
SUBJECT: LIBERIA: PRESIDENT WAIVES TAXES FOR LOW-SALARIED WORKERS

REF A) MONROVIA 629 REF B) MONROVIA 608



1. (U) The GOL announced an Executive Order August 14 that waives
income tax for salaried workers earning less than US$70 a month.
The GOL statement explained the action was necessary "to address the
increased need to mitigate economic shock and hardship, a
consequence of the global increase in the prices of basic and
essential commodities, especially food." The waiver is retroactive
to July 1, the start of the fiscal year, and expires when the
revised Revenue Code, which will codify tax adjustments, eventually
takes effect. (Note: The revisions are still being drafted.
Treasury OTA will be providing assistance in the coming weeks. End
note.)


2. (U) Liberia's FY2008-09 budget increased the minimum GOL salary
to US$70 a month (Ref B). This past week, the GOL announced
increases in the ceiling price of rice and reductions in the ceiling
on petroleum products (Ref A).


3. (SBU) Comment: This decree, by indicating that everyone, even
the lowest earners, should be filing tax returns, sends a resounding
message in a country where "taxpayer" has been assumed to mean
"large foreign firm." However, the fiscal impact of the tax waiver
is primarily symbolic. It assists only GOL salaried employees
earning the exact minimum wage (who do not declare other income they
may receive in addition to their official salary). Although there
may be non-government salaried employees who earn under US$70 a
month and were paying taxes, they are likely to be few. That said,
it is an important step towards moving away from subsidies and price
controls towards more economically efficient methods of assisting
the poor. The next step is to increase the minimum wage so civil
servants earn at least the US$150-200 a month that seems to be the
threshold that would permit an employee to live solely on official
income. End comment.

ROBINSON