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capacity with the proceeds of these depletable resources. (This
will be dealt with in more detail in the next section,
"Development Planning and Expenditure Patterns" .
The financial contribution of companies engaged in the production
of agricultural and forestry products - which activities are in
principle perpetual ones - was very low. The only significant
plantation company/tax payer (Firestone) never contributed more
than $ 4.7 minion to domestic revenues (in 1963) whereas this
company's yearly average during these 15 years amounts to only
$ 3 million. Considering the company's role in the domestic
economy this can be called a modest performance. The main cause
of the plantation sector's small contribution to the Treasury
lies with the basic principles of the Open Door Policy. The
consequences of the generous granting of tax exemptions and
income tax holidays have been further aggrevated by Liberia's
poor administrative system and by tax evasion. The occasional
inability of the Ministry of Finance to determine the expiration
dates of tax holidays and of duty free privileges, the use of
disguised equity capital, the concessionaires' reluctance and
even refusal to provide the Liberians with information requested
and Firestone's manipulations as to the fixing of the price(s)
of its product(s) may serve as examples. Unless stopped, the
evasion by most of the logging companies of the reafforestation
rules will put a definite end to income derived from the
exploitation of the country's rich tropical forests, not to
mention the extreme harm it causes to the environment as a
result of the subsequent erosion of the soil. The Government's
income from the concession sector is far from being maximized.
The Treasury has foregone millions of dollars annually because
of the unnecessary continuation of privileges granted
initially as an incentive to start production. If the
Government had granted these (tax) privileges in order to make
a production profitable which it would not .be without these
exemptions, this would simply mean that the Liberian Government
is subsidizing the export of the country's natural resources in
general and its depletable resources in particular. However, the
yearly profits of these companies do not justify this conclusion.
Firestone's duty free import privileges and exemption from
export taxes on rubber (abrogated in 1976) were not justified
either by the company's "pioneering effort" or by the financial
losses which might have resulted from an elimination of these
privileges. The 1935 payment does not form a sufficient
justification either.
Total revenues foregone because of the exemptions granted are
immeasurable. The Liberian Treasury lost potential revenues of
nearly $ 300 million just during the five years 1975 - 1979 as
a result of the policy of granting (import) duty free
privileges. This means that every year an amount averaging almost
J 60 million was foregone, representing about 40 per cent of the
annual average Domestic Revenue of the Government (53). It is
true that not only foreign concessionaires and investors enjoyed