Farhat’s Concerns Should Be Taken Seriously
He ran for President in 2005 alright. Why? Nobody knows, for even though he hails from Grand Bassa, he hardly ever lived there, having been raised from childhood by Monrovia’s prominent Luke family.
He got his beginnings in business by selling Mrs. Luke’s cornbread, rice bread, shortbread and other pastries from the Luke’s Broad Street home, where GN Bank is now located. That is how Mrs. Williette Luke helped keep the family going. Her husband, Mr. Henry Luke, was an electrical engineer and one of the pioneers of the Liberia Electricity Corporation (LEC).
Young David, always a quiet and serious-minded young fellow, paid keen attention to his studies and did well in school, majoring in Accounting. And though he served, during the Tolbert administration, as Deputy Minister of Commerce and Public
Works, respectively, and also Finance Minister during the Samuel Doe administration, David Farhat was never a leading socialite or sought-after public speaker. And though he, too, once headed the Finance Ministry, he was no Charlie B. Sherman, who served for over a decade as Tubman’s Treasury Secretary. During those years and even before, the highly intelligent and eloquent “Charlie B” was the nation’s most sought-after public speaker, at commencements and numerous other occasions. He and Dr. Rocheforte L. Weeks, President of the University of Liberia, as well as Ernest Eastman, first Director of the Afro-Asian Bureau and later Deputy Secretary of State, were among the choice public speakers in the country.
So what led David Farhat to wax eloquent when some journalists showed up at his office last week Wednesday? During that interview, he warned the government to limit or temper (soften) its vigorous collection tax policies, given the prevailing economic and financial realities facing the country at this time.
As a businessman himself who, during exile in the United States, successfully ran petroleum stations, he is quite aware of the problems businesspeople face. One of the challenges is taxes and other fees they must pay to meet their legal obligations to the government.
Mr. Farhat knows that there are many businesspeople who, in good and bad times, would do everything possible to avoid paying their taxes. Many tax officers, too, get into trouble and face dismissal and even prosecution for conniving with businesspeople to avoid their legitimate taxes.
But the main point Mr. Farhat was making on Wednesday was an appeal to GOL to recognize the nation’s current difficulties. The Liberian dollar is seriously challenged by the US dollar, due to the drastic fall in commodity prices, especially rubber and iron ore, the nation’s two leading foreign exchange earners. As a result, many major corporations, including the Firestone Plantations Company, the nation’s leading rubber producer, are on a go-slow; while the leading iron ore companies, including the biggest, ArcelorMittal, have all but stopped production.
But during the earlier part of the decade, when commodities were great, with rubber alone over US$2000 per metric ton, the GOL, especially our agricultural managers, lacked the foresight to invest in cocoa, whose world market price is always good.
Liberia had no Joseph to warn of the coming lean years and prepare for them in times of plenty, while things were good. And so, when “the good times” stopped rolling and the years of plenty ended, Liberia, in this final year of President Sirleaf’s administration, is scrambling for survival.
Mr. Farhat is, in these difficult times, calling for flexibility in the tax regime. One of the most serious warnings he gave in his interview was this: If Firestone, unable to pay the required taxes, as well as meet its other expenses, closes down, would government be able to run this giant of a company?
We can hardly successfully run one Ministry, Agriculture, with its few hundred employees and few thousand farms scattered across the country; how will we be able to run Firestone?
So Mr. Farhat appealed to GOL, particularly the Liberia Revenue Authority (LRA), to recognize Firestone’s predicament and in so doing keep the company, the nation’s largest employer besides government, going.
Perhaps it would be necessary for GOL’s three principal economic and financial operators, Finance Minister Boima Kamara, Central Bank Executive Governor Milton Weeks and LRA Commissioner General Elfrieda Tamba, to hang heads and devise an effective strategy toward keeping the Liberian economy on an even keel.