The_Open_Door_deel1

Though the company's income tax payment in 1951 represented almost
half of the total revenue of the Government in that year, its
profits after taxes were still more than tree times the total
income of the Liberian Treasury. In 1952 and 1953, too, the net
income (before taxes) of the Firestone Plantations Company exceeded
the Government's Total Income. An author who in 1956
wrote a public-relations book for the company reported that the
activities of Firestone in Liberia were more profitable than
those anywhere else (55). In the 1956 - 1964 period the Firestone
Plantations Company paid over $ 85 million in dividends to the
Firestone Tire & Rubber Company, which amount excludes other
transfers of income such as those through intercompany sales and
lending practices, whereas operations in Liberia were self financed
by the Plantations Company through a system of retained
earnings. Excluding the other subsidiaries of the U.S. parent
company, the total profits made by Firestone in Liberia may be
estimated at between $410 million and $ 415 million during the
1926 - 1977 period (based upon official data).
Low costs of labour were largely responsible for this result. As
payments by the Firestone Plantations Company to the Liberian
Government in the same period may have totalled about $ 110
million nearly three out of every four dollars earned in Liberia
by Firestone were transferred to the U.S.A. (or were added to the
company's retained earnings in Liberia from which its Liberian
operations were financed).
The price Liberia paid for Firestone having privileges in an
organizationally and institutionally underdeveloped country will
probably never be known. In the 1965 - 1975 period alone the
Government was annually deprived of some $ 600,000 - $ 700,000
because of the company's duty-free privileges (56). After the
introduction of a Withholding Tax in 1968 the Government's
accountant, the British firm of Whinney Murray and Company,
audited the Firestone income tax statements and concluded that the
Government had lost potential revenues of between $ 500,000 and
$ 930,000 in 1967/68 and 1968/69 respectively (57). Attempts in
1978 to trace records that would show that the Government ever
recovered these amounts were futile. On the issue of Firestone
Plantations Company paying a rental to the Firestone Tire & Rubber
Company the same British Company already In 1969 rejected this
construction. The actual historical expense of owing the
Plantation, i.e. depreciation, was found the only allowable
expense (58). However, the Firestone Plantations Company
successfully delayed the solution of this problem (59), and the
question was not solved until 1976 when the title to the plantation
assets was transferred to the Firestone Plantations
Company. •
Officials of the Concessions Secretariat of the Ministry of
Finance in 1974 insisted that the Government of Liberia should
send a tax bill to Firestone based on adjustment of the transfer
prices governing sales to Firestone of Akron (60). Owing to the
complexity of the problem and the shortage of staff within the
Concessions Secretariat, as well as to political factors, the