The_Open_Door_deel1

-439-
to the distribution of power, which is almost as unequal.
On July 1, 1977 a new Revenue and Finance Law went into effect.
It abolished the Austerity Tax which had taxed income below the
statutory exemption (of Income Tax) of I 1,500 per year. This
thus favoured the lower incomes. Simultaneously the legislation
with respect to the Hut Tax changed. Prior to July 1, 1977 this
tax obligated each male tribal person of 18 years or more to
pay $ 10 a year, regardless of economic status or income. After
that date this was changed into a $ 10 Development and Progress
Tax and a $ 5 Hut Tax which all adults became liable to pay
whether they lived in multiple-occupant huts or not.
Both the old and new tax structures can qualify as progressive
with respect to incomes of $ 1,500 and more per year but both
tax structures are regressive from the income level of $ 1,500
per year downward when total personal taxes are considered.
These taxes are comprised of Income Tax, Hut Tax and Development
and Progress Tax. The new Revenue and Finance Law is even
more regressive than the one it replaced as far as incomes of
I 1,500 or less per year are concerned. The new tax structure imposes
twice the tax burden existing under the old structure, mainly
affecting the poor rural people. It has been assumed here that
two adults occupy a hut. Hence, it can be concluded that the new
tax structure fails to effect any income redistribution towards
the rural sector and conflicts with national objectives as formulated
in the 1976 - 1980 Socio-Economic Development Plan (35).
A comparative study of the old and new personal tax structures
presented as a general conclusion that, with the new Revenue and
Finance Law, (i) the lowest income group is taxed more than before,
(ii) the urban poor enjoy some relief and (iii) the higher
income groups pay slightly higher rates. It further recommended
that since a sizeable portion of the National Income originates
as non-wage income, heavier taxation of property income and the
institution of inheritance tax will contribute significantly to
a redistribution of the National Income (36).
It was shown in Chapter 10 that tax enactment and tax enforcement
are far from synonymous in Liberia. Tax evasion is a national
characteristic but those who are better placed generally succeed
better in evading their obligations as tax payers. Not
everyone, however, benefits from the political protection which
family relations, social status and descent, and membership of
the same club or Masonic Lodge provide. In 1978 e.g. the tribal
people in Gibi Territory were forced to pay the $10 Development
and Progress Tax twice. Whereas, in accordance with the law, the
employer withheld ten dollars from their salaries which amount
he transferred to local tax authorities, local tax collectors
harrassed the same tribal people and forced them to contribute
the $ 10 Development and Progress Tax a second time (37).