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Wednesday, April 24, 2024

Liberian President Boakai Removes Fuel Tax to Curb Cost of Living

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By Festus Poquie

Liberian President Joseph Boakai has taken steps including removal of a controversial tax on petroleum products to improve the cost of living in the West African nation, days after the world Bank said over 3 million people were sitting in poverty.

In an Executive Order announced Tuesday, the President suspended $0.20 surcharge on petroleum pricing structure with immediate effect.

The fuel levy was introduced in 2016 on every gallon of petroleum product imported into Liberia. Between 2019 and 2023 it was increased to $0.50 consonance with the National Budget Law for fiscal year 2019/20.

Fuel levy or gas tax as road user charge in fiscal year 2019/2020 amounted to $26,597,871, while remittances in the same year amounted to $12,106,014, according to data published on the National Road Fund website.

By July 2019 importers were owing government about 21.7 million, a case that lead to the impeachment and removal of a Supreme Court jurist judged complicit in aiding the defrauding national government.

The President believes that lowering the cost of petroleum will have a positive impact on the lives of Liberians, as it will reduce the cost of goods and services, spur productivity and business profitability, as well as increase revenue for the government, a statement on the presidency website said.

Liberia has been grappling with widespread poverty, with the World Bank reporting that over 3 million people in the country are living in poverty. Recognizing the urgency of the situation, President Boakai made reducing the cost of living a key promise during his campaign.

“We know the cost of living in this country. We want to improve it, ” he said after his November 2023 victory.

“We want to quickly review and find reasons for some of the hardship, especially in areas that are essential to their livelihood,” he said after Monday’s declaration. The results were the tightest since end of civil war in 2003.

Inflation quickened to 12.4% in June, 2023 the fastest pace in more than two years, before easing to 10% in September. The International Monetary Fund forecasts it will moderate to 8% this year.

The Liberian dollar is the eighth-worst performing African currency tracked by Bloomberg against the dollar this year — having depreciated more than 18%.

The country of 5.4 million people is struggling to recover from two civil wars and its worst ever outbreak of Ebola that peaked in 2014. Per-capita income stood at $754.5 last year, more than two times lower than the sub-Saharan Africa average, according to the World Bank.

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