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Doing Business Reforms PDF Print E-mail

Doing business 2011Doing Business reforms are a crucial element of our work at the Sierra Leone Business Forum. 

Through advocating for reforms aimed at streamlining various procedures including business registration, tax payment, registering property, construction permits and trading across borders, the Forum has enabled Sierra Leone to make steady progress in improving its ranking in the annual World Bank Doing Business publication.

Between 2009 and 2011, Sierra Leone has moved upwards by 13 places from 156 to 143 out of a total of 183 economies and is the top-performer in terms of ease of doing business in the Mano River Union comprising Guinea, Liberia, Ivory Coast and Sierra Leone.

It is also listed among the 37 best performing countries in the world according to this criterion. The status of doing business reforms at the end of May 2010 were as follows:

1. Construction Permits

The issuance of building permits and building inspection functions have been transferred from the Ministry of Lands, Country Planning and the Environment to the Ministry of Works, Housing and Infrastructure. This led to a reduction in the time to issue location clearances and building permits.

Summary of Reform: Sierra Leone eased the process of building permitting by streamlining the issuance of location building permits, location clearances and building inspection functions.

Impact: Reduced time for processing permit applications and also encourage investment in the construction sector that is an important source of growth to the economy.

2. Paying Taxes

Effective 1 January 2010, a Goods and Service Tax was introduced to replace the sales tax and six other taxes on services. In light of this, a Customer Service Center was established to provide information on GST and other taxes to the public.All tax-related laws and amendments have been consolidated in the Consolidated Income Tax Act and tax forms have been simplified. In addition, the National Revenue AuthorityIntroduced the TIN (Tax Identification Number) which eliminated separate customer numbers required for Income Tax, importing, exporting and sales tax.

Summary of Reform: Sierra Leone eased the tax burden on business by replacing some existing sales/services taxes with a goods and service tax.

Impact: Reforms in tax payment procedures will reduce compliance costs to businesses and lead to a better understanding of tax requirements.

3. Registering property

On July 8th, 2009, the moratorium blocking property transfers was lifted with  regards to privately owned property, but it is still enforced for lands owned by the State.  Private properties can now be transferred without any restrictions.Previously, on November 19th 2008, the Government of Sierra Leone had reinstated the moratorium regarding the Director of surveys' signature, thus preventing the transfer of properties.

Summary of Reform: Sierra Leone eased the process of transferring property by lifting the moratorium on sales of privately owned properties.

Impact: Increased administrative efficiency (more employees, better organization, incentives for employees). It will also encourage businesses to document and formalize and also facilitate access to finance since these can act as collateral in banks.

4. Trading Across Borders

The Automated System for Customs Data, ASYCUDA, a computer software package to electronically process documents related to customs clearance, was introduced in November 2009 and became fully operational in May 2010. With the assistance of United Nations Commission on Trade and Development who designed the widely used computer software package, Sierra Leone’s National Revenue Authority (NRA) Customs and Excise Department (CED) implemented the system with the hope of addressing the problems of perceived corruption and delay in clearing goods at the port of Freetown. It will also enable the government to obtain timely and reliable information on trade statistics and revenue collected. With the new system, customs declarations are processed electronically through the Single Administrative Declaration (SAD), and manifests are also be obtained and handled electronically from shipping agents. These electronic processing has accelerated the clearance time and simplified customs procedures leading to a reduction in time to export and import.

Summary of Reform: Sierra Leone sped up exporting and importing through the  implementation of an electronic data interchange system.

Impact: This reform will improve the movement of cargo across borders and also boost trade within the region and beyond.
With the recruitment of a new DB consultant by the SLBF in October 2010, the Forum is now better placed to ensure that the country makes significant improvements on the various DB indicators before the cut-off date in 2011 to ensure an even better ranking in the World Bank’s DB 2012 Report.

 

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