Fouani Brothers Defrauds Gov’t Of Millions–Hot Pepper Investigation Reveals

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Pieces of evidence being gathered by the Hot Pepper investigation suggest that Fouani Brothers Corporation, since 2021, has been coordinating a series of criminal activities to defraud the Government of Liberia (GOL) of millions of United States dollars in taxes, at the detriment of the Weah administration that is eking to meet the development needs of the country and its citizenry.

A document in the procession of the paper disclosed that, on April 18, 2022 the Ministry of Finance and Development Planning awarded Fouani Brothers Corporation a special tax incentive, granting them incentive deductions and exempting the corporation from general service tax (GST) and import duties for a list of items being imported by the corporation into the country, including specialized vehicles, capital spare parts, as well as cartons, boxes, cases, bags and other packing containers, of paper, paperboard, letter trays and similar brands used in offices, shops or the like. In addition, they were granted to import, duty free, palm oil and its fractions, whether or not refined, but not chemically modified.

The certificate of special tax incentive was awarded to Fouani Brothers approximately six months after they had prepared the Investment Incentive Agreement to build a crude palm refinery in Liberia but without submitting to the relevant authorities.

Apparently testing the system to know whether or not their deal would cross, Fouani applied for the special tax incentive, and it was granted. They criminally hid behind the special tax incentive to import processed vegetable oil, which they only bottle and name-stamp at the Freeport of Monrovia for onward distribution on the Liberian market.

According to the investigation, Fouani imports 4,000 (exactly 3,999.06) metric tons of already processed vegetable oil on a quarterly basis, amounting to 15,996.24 metric tons every year.

According to a tax payment professional from the Liberia Revenue Authority (LRA), for the quantity of vegetable oil imported quarterly, Fouani should have paid US$1,192,390.06 (one million one hundred ninety-two thousand three hundred ninety United States dollars and six cents) in duty and GST. However, because the corporation holds a special tax incentive certificate, the company only pays US$32,020.48 (thirty-two thousand and twenty United States dollars and forty-eight cents) in general service tax (GST), and defrauds the government of US$1,160,369.58 (one million one hundred sixty thousand three hundred sixty-nine United States dollars and fifty-eight cents), which should have been paid for duty on the finished products.

If the US$1,160,369.58 that Fouani defrauds from government every quarter is multiplied by the four quarters of the year, it will sum up to US$4,641,478.32 (four million six hundred forty-one thousand four hundred seventy-eight United States dollars and thirty-two cents), which the government could have used to impact several sectors of the Liberian economy. Consequently, the certificate is valid for three years, and Fouani has enjoyed six quarters of duty-free importation of the product (April 2022—October 2023), defrauding the government of US$6,962,217.48 (six million nine hundred sixty-two thousand two hundred seventeen United States dollars and forty-eight cents).

Seemingly not feeling secure with the Certificate of Special Tax Incentives because it does not mention vegetable oil on its list of raw materials, a few months ago Fouani Brothers Corporation submitted its investment incentive agreement to the Executive branch of government, requesting the permission to construct a crude palm oil refinery in Liberia and the leverage to import all equipment relative to the construction of the refinery on duty-free. The corporation mysteriously squeezed in the importation of vegetable oil as raw material on the investment document. Unfortunately, the crafters may have forgotten to update the date of the preparation of the document, October 22, 2021, which is maintained on the cover page of the bill, as accessed by the Hot Pepper.

Fouani, with huge financial inducement, managed for the instrument to be signed by the President of the Republic on September 5, 2023 and forwarded to the House of Representatives on September 6, 2023, after the House had gone for recess but, again, managed for the bill to be passed mysteriously in the absence of almost all the lawmakers and forwarded to the Liberian Senate for approval. Luckily for the state and the citizenry, the Senate, in its wisdom, tabled the discussion of the matter until the National Legislature could resume.

Now that normal work has resumed at the Capitol, the Lebanese boys are on their heels to make sure that the Senate concurs with the House, at the detriment of Liberian farmers and the revenue intake of the country.

But their aspiration has encountered maximum challenge by several representatives, who are requesting that the bill be sent back to the lower House in order for them to rectify their mistake. Also, newly elected representatives are describing the bill as against the interest of the people, and cannot agree for such a bill to be passed during their administration.

As public attention is now focused on the decision of the Capitol as it relates to the Fouani investment incentive agreement, several individuals are calling on their lawmakers not to sign the passage until all the unnecessary clauses are removed, or better still vote against its passage in totality. To be continued.

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