Photo: Mr. Al-Bueshi Al-Lafi

By Sami Zaptia

The head of the tax authority showed initiative and the will to take action immediately on Wed 24th when there were operational problems on the ground.

Those visiting the Companies Section of the Tax Department in Ben Ghasheer would have noticed the chaos there in December. Things came to a head between the 22nd to 24th December as hundreds of people - including myself - queued to stamp and pay the tax on their invoices. All official invoices in Libya should be registered with the Tax Authority after a payment of 2% (plus 0.5% of that 2%) before presentation to clients for payment.

My local office is the one at Ben Ghasheer, and since the beginning of December presenting an invoice for processing has become a one week affair. Well, things really became chaotic by the 24th with arguments and quarrels developing as tempers rose amongst the big crowds. We were forced to wait in queues all morning, and by 11.30 the cashier would refuse to take on any more invoices as he was obliged by Libyan law to close by 12pm.

You will not be surprised to hear that this department - like many central bureaucracies - is understaffed. Everything is still done manually and paper-based with minimal use of computerization. The office where we present our invoices is not big enough for one-hundred people and it certainly is not big enough for five different transactions.
The routine - and it is a time and paper wasting bureaucratic, inefficient and backward routine - goes like this. You first queue at reception to register your invoices in the companies section (1 original and 2 copies), giving your company tax registration number.

After that queue you join the 'estimation' (taqdeer) queue inside the main payment hall. Once the tax staff have scribbled on the back of your invoice the official estimate you have two options. If the taxable amount is below 10 Dinars you can pay immediately by queuing for, buying and sticking some duty stamps on the invoice. If it is more than that you must pay in cash or by draft cheque.

If you can pay instantly or you can bring your draft cheque by 12pm on the same day, you must then queue again in the 'in-putting' (idkhal) queue. When your invoice is in-putted into the cashier's computer you go and wait in the cashier section where your name is called out as per the list on the computer.

However, at the end of each working day the computer list is wiped clean. Therefore, if you went away to either get cash or to your bank to get a draft cheque, and for some reason you did not return by midday, you must queue again and repeat the inputting process again.
The one-and-only cashier's computer was out of order for the two days that I turned up with my invoices. There were huge crowds queuing all the way out of the hall in the cold.
On the morning of the 24th December the Managing Director of the Tax Authority Mr. Al-Bueshi Al-Lafi personally turned up to sort out the problems. He introduced himself to the queuing and gathered crowds and listened to their complaints.

We complained that the invoice registration tax payment procedure was very bureaucratic, time and paper wasting, and out of date. We should not have to queue for hours in three different queues, see three different people, and queue outside in the cold. We complained that there should be more staff to process the volume of tax payers. We also suggested that the cashier should stay open beyond 12 pm, as this very much shortens the working day and that there should be more than one cashier. We suggested that the lower duty stamp payment limit should be raised and that the cash payment limit should be raised too.

For example, there were people sharing the queue to pay LD 20 on a LD 1,000 invoice, LD 2,000 on a LD 100,000 invoice, while others were representing million dinar companies.

We pointed out that we - the business community - through our taxes pay for many government employees' wages and that, jokingly, we should be served tea and coffee and treated like customers. We pointed out that because of the long queues and waiting times there should be more chairs and tables and more room as the payment section is too small. In fact, it is high time the tax departments were built their own purpose-built offices with ample room for tax payers and ample parking space.

We reminded him of his promises at his tax seminar to reform the tax system. How can you complain about tax evasion if this is how tax payers are treated? Tax paying should be made easier. If the general public is not willing and not encouraged to increasingly pay taxes how can Libya reduce subsidies, reduce public sector employees and diversify its economy?

Firstly, I would like to say that it is a very good sign that the head of the Tax Authority was proactive and came out of his comfortable air conditioned office, faced the crowds head-on and took immediate action. He explained that the city centre office had been shut down and that many were now transferred to this office. He then immediately ordered the cashiers to stay open until 12 midnight if necessary in order to take money from the queuing tax payers.

The head of the tax authority both in his speech during the December tax seminar and in his Tripoli Post interview had a lot of positive things to say regarding reform of Libya's taxation system. But he also showed initiative and the will to take action immediately on Wed 24th when there were operational problems on the ground.

I am happy to conclude that the story ends on a positive note. When I returned on the 25th December to collect my processed invoices, they were ready. New offices were opened up, as the queues were separated to different areas creating room for the extra tax-payers. There were no crowds and there were many happier tax-paying customers - if that is ever true or possible! New chairs, tables and parasols were provided and a second cashier was operating well beyond 2 pm. Construction began in January on new offices. And finally, just to show that the head of the tax department has a sense of generosity and humour, there was free tea and coffee on offer which was still there on January 19th.

Well done to the head of the tax dept and to all at the companies' tax office. But it must continue to reform the tax system as promised and with equal vigor and urgency. I hope that all the other GPCs become equally proactive and act with equal urgency to resolve our bureaucratic, inefficiency, mismanagement and poor customer service issues.

This tax department episode proves that where there is a will there is a way. If many more heads of departments and General Secretaries of GPCs (ministers) got out of their offices more often and did the rounds within their various departments so that they are seen by their staff to be caring, it sends the right signal to all the staff. Let us hope this sets the tone for 2009 and may I have many more positives to report on throughout this year.