§ Sir R. Aclandasked the Secretary of State for the Colonies whether he is now able to make a statement on the outcome of negotiations with the Government of Sierra Leone on the question of taxation of the diamond mining corporation in that country.
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§ Mr. LytteltonThe Sierra Leone Government have accepted the conclusions agreed at the negotiations subject to their approval by the Sierra Leone Legislative Council and by the Board of the Sierra Leone Selection Trust. The broad lines of these conclusions are as follows:
- (1) In place of the present Sierra Leone Income Tax (now 45 per cent.) which includes the original diamond industry Profit Tax at 27½ per cent., the Company to agree to pay both Sierra Leone Income Tax at the standard rate and diamond industry Profit Tax calculated on a sliding scale. This will yield to the Sierra Leone Government up to a maximum of 60 per cent. of the Company's profits.
- (2) The Company to increase its mining rent from £7,000 per annum to £10,000 per annum with effect from 1st July, 1953.
- (3) The Company to pay as from 1st July, 1953, £10,000 per annum as a contribution to the budget of the appropriate local Kono authorities, this sum to be spent in the development of the Kono country for the benefit of the Kono people with special reference to the local population in the neighbourhood of the mines.
- (4) The Sierra Leone Government to continue to assist the Company in all possible ways in the prevention and elimination of illicit diamond mining and diamond stealing and in particular to take early steps to amend the existing legislation so as to facilitate the apprehension of persons suspected to be engaged in illicit mining and to provide, on conviction, for more severe penalties.
- (5) The Sierra Leone Government to take all possible steps to clear up misrepresentation and misunderstanding regarding the Company's operations and to restate their policy of unified production and disposal of Sierra Leone diamonds.
- (6) The Company to pay to the Sierra Leone Government 15 per cent. ad valorem of all rough diamonds coming into the possession of any Government agency, such payments being a contribution towards the expenses of recovery.
It is estimated that the revised tax arrangements will yield additional revenue of about £145,000 in 1953–54 and about £105,000 in the following year.