PRESENTATION ON DUTY AND TAX EXEMPTIONS GUIDELINES REVENUE AND TAX POLICY UNIT MINISTRY OF FINANCE JUNE 22, 2018
Table of Content ❑ Background ❑ Policy Directives on Exemptions ❑ Categories of Beneficiaries on Exemptions ❑ Guidelines for Duty Waiver Applications ❑ Responsibility of MDAs in Duty Waiver Processing ❑ Responsibility of Clearing Agents in Duty Waiver Processing ❑ Duty Waiver for charitable Institutions/Organisations ❑ Minimizing Delays in Duty Waiver Processing ❑ Duty Waiver Process Map ❑ Observations, Issues, Questions and Answers
Background Government is committed to : ❑ Reducing leakages, enhancing domestic revenue mobilization for financing development ❑ Creating transparency and accountability in economic management ❑ Minimizing abuse or misuse of import duty and tax exemptions ❑ Ensuring that waiver requests are expediently processed
Policy Directives on Exemptions As part of the implementation of the Executive Order of revenue mobilization: ❑ All MDAs that enter into new contract agreements are directed to negotiate the prices of these contracts at market rates. ❑ Any contract for which costs are not inclusive of all tax payments by the contractor shall be declared null and void. ❑ All Contracts awarded by MDAs are to be cleared by the Ministry of Finance consistent with the law.
Categories of Beneficiaries on Exemptions ❑ Diplomatic Institutions covered by the Vienna and other allowable Conventions ❑ Charitable institutions/organisations registered with the Ministry of Planning and Economic Development and the National Revenue Authority ❑ Projected funded by Development Partners/Donors ❑ Agreements ratified by Parliament
Guidelines for Duty Waiver Applications 1. All requests for exemptions of customs duty and taxes should be covered under a budgetary provision by the Ministry of Finance 2. All MDAs are expected to raise the necessary vouchers to cover the total payment for customs duty and taxes for beneficiary institutions 3. All vouchers for diplomatic institutions should be raised by the Ministry of Foreign Affairs and International Cooperation, whilst those for other institutions including NGOs and charitable organisations to be raised by the supervisory MDAs
Guidelines for Duty Waiver Applications (cont…) 4. Each duty waiver application must be supported by the payment of a mandatory administrative fee of Le 1,000,000 payable to the Duty Waiver Joint Monitoring Account at the Sierra Leone Commercial Bank 5. A copy of the payment slip to accompany the approved duty waiver application form before submission to the Ministry of Finance
Responsibility of MDAs in Duty Waiver Processing All MDAs are advised to: ❑ Properly review all requests for duty waivers to ensure that they meet Government’s development objectives ❑ Raise vouchers for institution/organizations to cover the import duty and Taxes ❑ Process all waiver application within 48 hours from the date of receipt from the institutions/organisations (See process map) ❑ Forward completed payment voucher to MOF for further review and processing
Responsibility of Clearing Agents in Duty Waiver Processing All Clearing Agents MUST: ❑ Be registered and approved by the Ministry of Finance ❑ Obtain and duly complete the duty waiver request forms issued by the Ministry of Finance ❑ Ensure that their assessments of duty and other taxes are validated by a senior Custom Officer ❑ Ensure that the required administrative fees are paid and copies of payment slips are attached to the relevant documents before submission to the Ministry of Finance ❑ Provide to the Ministry of Finance an signed undertaking certified by a Commissioner of Oath, to take responsibility for the validity of documentation and information submitted in respect of duty applications submitted to the Ministry of Finance
Duty Waiver for Charitable Institutions/Organisations All duty and tax exemptions for charitable institutions or organisations must fulfil the following conditions: ❑ Items for duty exemptions must be received as donation or gift ❑ Charitable institutions/organisations should not be engaged in any commercial related activity of the imported items ❑ Goods imported are strictly for charity purposes and MUST be distributed free of charge, with no evidence of discrimination on the basis of belief, race or gender, in their distribution.
Duty Waiver for charitable Institutions/Organisations (contd …) ❑ Where it is proven that charitable goods are distributed with some financial cost, the beneficiary institution/organisation will face the full penalty of the applicable law . ❑ That the imported goods shall be accompanied by a distribution list, specifying a detailed information of the beneficiaries ❑ The distribution list must be approved by a senior officer of the supervising MDA, not below the rank of Deputy Secretary ❑ That charitable institutions/organisations should be registered as a charitable institution/organization with the Ministry of Planning and Economic Development and the National Revenue Authority
Minimizing Delays in Duty Waiver Processing ❑ To minimise demurrage and other charges due to delay processing and releasing of consignments, applicants or the clearing agents are own interest advised to begin the process of requesting waivers at least two weeks in advance of the arrival of the consignments for which exemptions are requested. ❑ All beneficiary institutions are required to submit their import requirements for the remaining half of the financial year 2018 (July – December 2018) by June 30, 2018 ❑ Henceforth, all institutions requesting duty waiver exemptions are required to provide to the Ministry of Finance, all their imports requirements for the first- six months of 2019 by end October 2018
Duty Waiver Process Map 24 Hours 48 Hours 48 Hours 24 Hours 24 Hours
Observations, Issues, Questions and Answers
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