LRA Denies Approving US$150,000 For A Single Vehicle, Amid Serious Economic Hardship
PHOTO: Commerce Min. Amin Modad and LRA HQ
By Our Reporter
Commerce Minister Amin Modad’s claim that an over US$100,000.00 vehicle his Ministry purchased under the MEDTECH Contract was authorized by the Liberia Revenue Authority has been denied by the LRA.
In a press statement issued in Monrovia today, Monday, September 23, 2024, the LRA clarified that it approved a request by the Commerce Ministry in early May this year “for US$96,000.00 from its Customs Capacity Building Fund under the Destination Inspection (DI) Contract held with MEDTECH Scientific Limited (MTS) for the purchase of vehicles to support the MOCI”.
Since reports emerged of the vehicle purchase under the controversial MEDTECH deal, the issue has sparked serious public debate, with both Minister Modad and the LRA coming under public criticisms in the wake of serious economic hardship.
The mounting public outcry also comes in the wake of President Joseph Boakai’s pledge that there will be “no business as usual”, vowing to ensure there is value for money in his 8-month-old Unity Party government’s stewardship.
The LRA clarified that in line with the Liberia Revenue Code as amended (the Code), it” is authorized to collect customs service fee”.
BELOW FULL TEXT OF THE LRA STATEMENT
LRA Clarifies Vehicle Purchase Allegations
(Monrovia, September 23, 2024): The attention of the Liberia Revenue Authority (LRA) has been drawn to recent media reports concerning the purchase of a vehicle for the Ministry of Commerce & Industry (MOCI) and various other allegations. The LRA provides the following clarifications:
Firstly, the LRA clarifies that it has not purchased a vehicle valued at US$150,000, as reported. However, it confirms the approval of the MOCI’s request in early May 2024 for US$96,000.00 from its Customs Capacity Building Fund under the Destination Inspection (DI) Contract held with MEDTECH Scientific Limited (MTS) for the purchase of vehicles to support the MOCI. These vehicles are intended for trade-related activities in collaboration with Customs. The specifications of the vehicles, as well as their deployment within MOCI, are determined by the MOCI, not the LRA.
It is important to note that in accordance with Section 1822 of the Liberia Revenue Code as amended (the Code), the LRA is authorized to collect customs service fee (which is separate from custom duty) for the performance of custom services (handling of documents, cargo inspection, etc.) and the hiring of any third-party inspection service provider. This is the basis for the DI contract with MEDTECH, under which LRA is entitled to 20% share of the fees collected. Upon the inception of the new LRA administration in March 2024, the LRA’s share under the DI Contract was held and managed by MEDTECH based on a previous arrangement between the former LRA’s leadership and MEDTECH. The request from the Ministry of Commerce for logistical support and LRA’s subsequent approval were done at the time this fund was still held and managed by MEDTECH.
It is further important to note that the Supreme Court placed a stay order on MEDTECH account in July 2023 and lifted it in June 2024. Immediately thereafter, the LRA formally requested the Ministry of Finance and Development Planning (MFDP), as required by the Public Financial Management (PFM) Act, to open an escrow account for depositing this 20% share which at the time had accumulated to US$3,381,035.99. The escrow account was opened on July 8, 2024, at Ecobank, and the funds were transferred from MEDTECH to the new account on July 11, 2024. Since then, the LRA’s share has been deposited into the escrow account monthly. As of August 31, 2024, the balance in the account stood at US$3,457,718.34.
The allocation of resources from the Customs Capacity Building Fund to the MOCI has been a standard practice for over eighteen years, spanning multiple customs inspection service contracts. This allocation plays a critical role in facilitating trade, where MOCI serves as the lead government agency for trade policy. The LRA remains committed to this long-standing collaboration in a transparent and accountable manner as it works to increase revenue collection to billions.
Additionally, over the years, the LRA has similarly provided support to various government agencies that are involved with revenue mobilization, including the Ministries of Foreign Affairs, Transport, Mines and Energy, Labor, as well as the Liberia Immigration Service, Liberia National Fire Service, and the National Legislature, among others. These collaborations have, in part, contributed to revenue increase of over US$53 million as of August 31, 2024, compared to the same period in 2023.
Regarding the allegation that the LRA granted Minister Amin Modad duty-free clearance for a yacht or boat, the LRA confirms that no such duty-free clearance occurred. Our records show that in July 2024, Minister Modad cleared a “motor vessel” (boat) and paid the required duties.
Concerning allegations of bribery, the LRA firmly denies any involvement with bribes from MEDTECH or any other business or individual.
While the LRA welcomes public scrutiny to promote transparency and accountability, we encourage media outlets to verify information before publication to prevent the spread of misinformation and disinformation that has the propensity to undermine revenue collection. The LRA remains committed to collecting lawful revenue for the Government and people of Liberia in a professional and transparent manner.
Signed:
Kaihenneh Sengbeh
Manager for Communication, Media and Public Affairs
Liberia Revenue Authority.