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AN ACT TO INCREASE DISPOSABLE INCOME FOR ALL TEACHERS AND HEALTH WORKERS IN THE REPUBLIC OF LIBERIA

Considering the necessity for Government to attract teachers and health workers into the rural parts of Liberia, through its push and pull factor strategy;

Whereas tax decrease increases disposable income, because it leaves households with more money and disposable income is the main factor driving consumer demand, which accounts for more than half of total demand;

In recognition that lower tax is a good fiscal policy prescription for a “challenged economy” and high unemployment; and

Whereas, the Constitution of Liberia in Article Eight (8) calls for the Republic of Liberia to direct its policy towards ensuring for all citizens, without discrimination, opportunities for employment and livelihood under just and humane conditions, and towards promoting safety, health and welfare facilities in employment;

Now, therefore: It is enacted by the Senate and House of Representatives of the Republic of Liberia in Legislature Assembled:

Section I. Title and Scope

1.This Act is referred to as “An Act to Increase Disposable Income for Teachers and Health Workers in the Republic of Liberia”.

2.This Act covers teachers of all institutions of learning from pre-school to university level in the Republic of Liberia;

3.All health workers throughout the Republic of Liberia shall benefit from tax decrease as expressed in this Act;

Section II. Goal and Objectives

The goal and objectives of this Act shall include but not limited to the following:

I.To enhance Government commitment to improve the quality of education and health delivery system of the country, especially the rural parts of the country;

II.To imbue dignity in and enhance motivation amongst rural teachers and health workers throughout the country;

III.To attract and encourage more qualified teachers and health workers to take assignment and remain in the rural parts of Liberia, thereby curtailing the in-flow of teachers and health workers from rural to urban.

Section III. Tax Decrease

I.That a tax decrease of 10% in the allowances and/or salaries of teachers and health workers throughout the Republic of Liberia be affected;

II.That teachers and health workers throughout the rural parts of Liberia receive a tax decrease of 15% in their allowances and/or salaries.

Section IV. Entry into Force

This Act enters into effect immediately following its passage into law.

Any Law to the Contrary Notwithstanding

Fiscal Impact Analysis (FIA) of the “Act to Increase Disposable Income for Teachers and Health workers in the Republic of Liberia”

The Public Finance Management Act of 2009, Section 19.1 reads1: “All proposed legislation submitted for approval of the Legislature shall be accompanied by a fiscal impact analysis, stating the legislation estimated effect on revenues and expenditures for the fiscal year in which the legislation would become effective, as well as the legislation’s fiscal impact on multi-year planning and budgeting”.

Consistent with the above law, the analysis is as follow:

1.Number of teachers in the Republic of Liberia
2.Number of health workers in the Republic of Liberia
3.Number of teachers in rural Liberia
4.Number of health workers in rural Liberia
5.Total amount Government spends on teachers in the Republic of Liberia
6.Total amount Government spends on health workers in the Republic of Liberia
7.Total amount Government spends on rural teachers
8.Total amount Government spends on rural health workers
9.How much Government stands to lose or gain?
10.How many rural teachers are poised to benefit?
11.How many rural health workers are poised to benefit?
12.What is the degree of benefits to the economy with respect to Government’s Poverty Reduction Strategy? Taking the followings into account:

Our national and collective quest in improving the educational and health care delivery system, and
Enhancing the quality of living for teachers and health workers in general and those providing services in rural Liberia in particular

Fiscal Impact Analysis Summary
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Meanwhile, in an effort to enact AN ACT TO INCREASE DISPOSAL INCOME FOR ALL TEACHERS AND HEALTH WORKERS IN THE REPUBLIC OF LIBERIA, AN ACT TO AMEND SECTION 200 (a) (3) (A) OF “AMENDMENTS TO THE REVENUE CODE OF LIBERIA ACT OF 2000, REPUBLIC OF LIBERIA” BY THE CONSOLIDATED TAX AMENDMENTS ACT OF 2010 has also been submitted by Sen. Kupee for amendment.

Whereas Government expressed commitment is to improve the quality of education and health-care delivery system of the country, especially in the rural parts;

Whereas the importance attached to imbuing dignity in and enhancing motivation amongst rural teachers and health workers throughout the country cannot be over-emphasised;

Whereas Government is determined to attract and encourage more qualified teachers and health workers to take assignment and remain in the rural parts of Liberia, thereby curtailing the in-flow of teachers and health workers from rural to urban;

NOW, THEREFORE;

IT IS ENACTED BY THE SENATE AND HOUSE OF REPRESENTATIVES IN LEGISLATURE, ASSEMBLED:

Section 1. That from and immediately after the passage and subsequent publication of this Act, Section 200 (a) (3) of the Liberia Revenue Code of 2000, as amended, is hereby further amended to read as follows:

Section 2. The tax rate applicable to the income of a natural person is determined in accordance with the following rate schedule, except in the case as mentioned below:

I.A tax decrease of 10% in the salaries and/or allowances of teachers and health workers throughout the Republic of Liberia be affected;

II.Teachers and health workers throughout the rural parts of Liberia receive a tax decrease of 15% in their allowances and/or salaries.

(A) The rates and tax computation shall be as stated in the following table:

Tax Table for Resident Natural Persons
Step Taxable Income of –
(Liberian Dollars)
Tax Rate and Computation
(Liberian Dollars)
1
0 to 70,000
Nil
2
70,001 to 200,000
5% of the excess over 70,000
3
200,001 to 800,000
6,500 + 15% of the excess over 200,000
4
800,001 and above
96,500 + 25% of the excess over 800,000

ANY LAW TO THE CONTRARY NOTWITHSTANDING