Government through the line ministry of Finance has announced the restoration of what is being described as sin taxes. A sin tax in the simplest terms is referred to as an excise tax on specific goods and services due to their abilities, or perceptions, to be harmful or costly to consumers in a given economic society. Sin tax comes in at the time of purchase and some items that often have a sin tax include tobacco products, alcohol, and legal gambling.
Explaining the amendments of existing laws under the 2024 Finance Act, spanning back to Cap 274, the Deputy Director of Revenue Tax Policy Unit, on Monday 12 February 2024at the Ministry of Information and Civic Education conference hall, the Deputy Director of Revenue Tax Policy Unit, Ministry of Finance Mohamed Bailley disclosed that the purchases of land and certain bank loans should be registered in their respective values.
He said loan should be valued in the amount of money secured from the financial service delivery institution or bank, quoting the Excise Act of 1982, which says alcohol should be taxed based on the content of alcohol in certain beverage drinks.
Bailley said that is why government through the Ministry of Finance deems it fit to restore sin taxes of the aforementioned goods and services among host of others to minimize their public consumptions.
Bailley informed that coke is also another goods on which has been restored because of the high content of sugar used in the manufacturing of the beverage drink.
The revenue tax expert furthered that certain juice with high concentrate of sugar are also highly taxed based on its sugar content, adding the cigar, cigarette etc. are as well highly taxed as sin tax with consideration that consumers will reduce their consumption.
He reiterated that sin tax is being restored on such goods and services to discourage consumers from using harmful goods and services.
As for income tax, he said the 2024 Finance Act defines turn over or alternate tax that are affected, and pointed out that disparities in corporate income taxes have been harmonised, adding that any capital income can be paid at the same rate.
As for mineral exports, Bailley explained that Sierra Leone has a safe harbour for mineral such as iron ore diamond, gold etc. which are all sold at the same rates as in Asia, Europe and other parts of the world. He noted that all Foreign Service personnel end of service benefits are now pegged at local grades.
