The_Open_Door_deel1

-97-
poration for the period 1963 - 1977. Under the 1962 Tax Agreement
with the Liberian Government, the Liberia Company and the
Liberian Development Corporation are taxed as a single entity
whereby only income from Liberian sources is taxed. In reality
this income is 90? of the profits of The Liberia Company, the
other 10? going to the Liberian Educational Foundation. (see
Table 3).
In 1967 and 1968 no income taxes were paid to the Government by
the Liberian Development Corporation as the company had used its
rights of deferred amortization. If the additional assessments of
1970 and 1975 are included and the Government's share in the net
income of The Liberia Company prior to the Tax Agreement of 1962
is estimated at a total of $ 400,000, the total direct financial
benefits of the latter from The Liberia Company's operations in
the country may be assumed to be between $ 60,000 and $ 70,000 a
year, and will decidedly not have exceeded the modest amount of
$ 2 million during the 30 years' existence of the company (1947 -
1977).
Hardly an impressive amount indeed and very disillusioning in
vi-ew- of the ambitious role the company was assigned in the
development of Liberia at the time of its creation, shortly after
the Tubman Administration had come to power.
In reality, the handsome profits of the Liberia Mining Company
which The Liberia Company shared through its 8? equity interest
were used to finance a venture which became increasingly legs
successful, less ambitious, and less idealistic, and which by 1977
played only a very minor role in the country's economy when
compared to the other concessions, (see Table 4).
In the light of the actual contribution to the Liberian Treasury
the impression cannot be avoided that the privileges granted to
the company, such as the $ 1 million amortization on "goodwill" of
The Liberia's Company's predecessor, the preferential treatment
through the 1962 Tax Agreement, and the deferred amortization and
loss carry forward privileges granted under the same agreement,
were, and still are, out of proportion, notably against the
background of an institutionally and economically underdeveloped
country. The almost inextricable complexity of the organizational
structure of this concessionaire alone-, and the subsequent
dealings with tax laws froj at least three different countries
made demands upon the Liberian Government which in the past
it found impossible and even at present difficult to meet. Two
successful actions were taken to cope with loopholes in the
tax system and to deal with overt or disguised tax evasion by The
Liberia Company. These resulted in additional income tax
assessments amounting to $ 22,433 ($ 18,696 income tax and $ 3,737
statutory interest) in 1970 and $ 85,250 in 1975 (paid under
protest in 1977).