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Sierra Leone: Tax defaults may halt operation of state telco, telecom regulator

Sierra Leone: Tax defaults may halt operation of state telco, telecom regulator

National Revenue Authority has corresponded with NATCOM, with Sierratel reportedly owing US$14m in taxes and debt.

Sierra Leone's National Revenue Authority (NRA) has written to inform the country's telecom regulatory agency, NATCOM, of its intention to "seal, lock up or in any physical manner prevent any person from entering or gaining entrance to your premises" for unpaid taxes.

NRA seeks to collect an outstanding tax due of about US$4.2m from NATCOM. "Be reminded that the Domestic Tax Department (DTD) has revisited your concerns, and have come up with final position of executing distress action to retrieve the established tax liability of Le32,935,000,000.00 to the government of Sierra Leone," NRA stated in its 17 April letter.

Coming in the wake of a new government taking over power in the last two weeks, NRA's move seems like a quick review of some of its past activities.

According to the executive director of Open Tax Initiative, Tanu Jalloh, NATCOM has been a powerful source of non-tax revenues as it administers the resources it raised which has now been reversed to be about US$30m.

"Natcom's retention of money it collected, on which it is supposed to pay tax, has just been stopped by the new govt," Jalloh said via Whatsapp. "As a result, it was asked to remit to the consolidated revenue fund cash in its possession amounting to $30m."

The NRA has not specified a deadline for the payment to be made or when it will take action.

Jalloh explains why it could happen anytime. "Usually after that notice, which invoked the relevant laws, they can move in within three days. It is more or less a warrant which can be executed as immediately as the NRA is ready to do so."

The state-owned telco, Sierratel, is suffering a similar fate as NATCOM. The Sierra Leone government has frozen withdrawal from its bank accounts until it pays back approximately US$14m in taxes and debt.

An executive order issued on 16 April stated that the national carrier owes the government Le2,929,770, 845.87 as custom duties and custom-related taxes and US$13,872,000.00 as debt service payment refund for Sierratel loans.

NATCOM is saddled with the responsibility of ensuring consumer protection against service providers while Sierratel seeks to position itself as the common man's choice in terms of affordability and wider connectivity of its network.

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