Shortfalls of the Asset Disclosure Requirement

By Francis Zazay


The Perspective
Atlanta, Georgia
October 10, 2009


I read with interest an article regarding the 90% noncompliance by Liberian government officials to declare assets, in the October 10 edition of the FrontpageAfrica. Rational reasoning might further justify that such noncompliant government officials seek legal action to prevent compliance enforcement. Evidently, it appears rather surprising that Liberia could set up a Liberia Anti Corruption Commission (LACC) just for the sake of asking government officials to declare asset. Considering the level of legal compliance and enforcement authorities currently in Liberia, other measure other than the LACC, can do this job, as opposed to creating yet another budget line item. Aside however, from creating yet another bureaucratic red tape, such as the LACC, the process appears structurally unfounded since it represents nothing but a discrimination machine against those in government.

While it makes no sense to give an exoneration clause, it is however prudent to state that I am not in the business of defending corruption, nor do I intent to defend any government official. My concern is merely drawn to the quick fix mentality that sometimes does not solve the problem. For what sense does it make to raise the legal compliance standard for one subject of the country and lower the standard for other subjects of the same country! The examples are abundant! How does the declaration of asset requirement cover other residents of Liberia who are not in government? What if one is not a government official and has never been and has no interest in government, but yet amassed some form of wealth by either legitimate reasons or some structurally arranged means that falls out of bounds with the legal system, how does this requirement apply to such person? What if one is not in the current administration but happens to have amassed wealth from previous government, how does the anti corruption laws apply to such person? When Liberia requires raising the legal bar for one resident and lowering it for another, it is considered discrimination according the Article 11(c) of the Liberian constitution. The law of our country requires for all to receive equal treatment before the law. To require government officials to adhere to stricter disclosure rules and not other residence, who currently reside in Liberia just as government officials, is discriminatory.

However, if Government of Liberia is really serious about the declaration of asset, let the process begin with addressing the source. The Revenue Commission of the Ministry of Finance, which has the authority to identify income, should be brought in the picture. That body, which requires annual filing of income by all citizens (this will create some income), ensures that it covers all residence. The next aspect is to broaden the definition of income, as it is stated in the Revenue code of Liberia (I am not sure if the new code carries the same definition). The old code that was recently amended has it that ....income is an inflow of resources from whatever source.... The code gave some examples that were very few. The rest of the examples, which could include anything from corruption, are income, the taxability of which is a determination of the Revenue Commission of Liberia. If this is in place, the failure of any government official, individual or entity to do proper and timely filing would be considered a failure to comply with revenue filing requirement.

The next issue would be administration and adjudication. That is if corruption income is discovered during a normal compliance exercise, then the burden of proof is to the person who did not file their income to the Ministry of Finance. If it is deemed that a prosecution is necessary, establishing evidentiary facts will be relatively less cumbersome since the revenue department has already started the process, given other legal ramifications. A system like this will cover many legal loopholes, prevents escapes and apply to everyone and not just government officials.

To ensure that all residence is covered, particularly during the corrupt and war periods, the statute of limitation for failure to file and compliance should include an extended period, say from the 1970s to the present. Then the estate tax law should be strengthened to ensure a success of the dreams of President Sirleaf's vision for income redistribution. The old revenue code did exclude estate taxes practically. The exemption amount and tax amount did not promote income redistribution in both theory and practice. My understanding is that there is currently a credit of up to $70.00 of nontaxable for civil servants, but there are others who make more than $70.00 and do not work in government, how are they covered under the asset declaration act?

This structuring could take time to conclude. It could take years but a stage by stage construction of efficient compliance system, when put in place will give power to existing authorities, including the Revenue Commission to exercise income and expense regimes that would ensure efficiency in lowering corruption. The appointment of one body to fight the other, which might be playing the same game, is less likely to succeed. On the other hand if the intent is firmed to maintain the current LACC, then it makes sense for other subjects of the state to be covered to avoid discrimination.

© 2009 by The Perspective

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