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had varied from $ 8 million to over $ 19 million. As explained
before, except for the high rate of income tax on dividends from
foreign subsidiaries in the U.S.A. the amount of the loans would
have been distributed as dividends to the U.S. parent company.
The position of the Government of Liberia was that at a fair rate
of return on this perpetual balance, of not less than 6 per cent,
should have been included in Firestone-Liberia's income tax
returns.
Secondly, Firestone-Liberia had rendered free technical services
and technical advice as well as assistance in the management of
rubber plantations to foreign affiliates (notably to Firestone-
Venezuela and Firestone-Philippines) whereas, according to the
Liberians, a compensation for these activities would have been
fair. A third issue involved in the May 1972 assessment was
related to the deductions claimed by the Firestone Plantations
Company for rentals paid to the Firestone Tire & Rubber Company
in_Oni°, varying from $ 730,832 in 1963 to $ 964,938 in 1971.
The amounts deducted were much higher than the amount of
depreciation which would have been allowed under Liberian law
in respect of the "leased" assets, which was $ 200,000 per annum
for the period in question.
However, the Ministry of Finance withdrew the last mentioned two
issues from the (protective) additional assessment, for reasons
which were not disclosed and won the first case, forcing the
Firestone Plantations Company to part with over $ 4 million. In
1976 the Ministry of Finance raised another issue and disputed the
company's accounting methods concerning the valuation of
subsidized rice which resulted in additional assessments made for
the years October 1973 - October 1975. These resulted in Firestone
paying additional income taxes, under protest, to the amount of
about $ 1.5 million (67).
It is little known in Liberia and therefore hardly appreciated
that these businessmen from Akron were confronted with serious
problems in Africa's oldest republic in the 197O's. Privileges
that had slowly but steadily been taken away during the 1950's and
1960's were exposed to open and violent attacks after President
Tubman had left the political scene, especially in the first half
of this decade, when the Finance Ministry was run by the brother
of the country's new President, Minister Stephen A. Tolbert,
himself a successful capitalist. He had dealt with Firestone
before when he occupied the top post in the Ministry of
Agriculture in the 1960's. Minister Tolbert 1 s attitude towards the
Firestone Company, as combined with the start of the
renegotiations of the 1926 Planting Agreement, made him also very
unpopular with the company's managers, who were greatly relieved
when they heard of his death in 1975. Having lost one of the best
persons to deal with the American rubber company, the Tolbert
Administration still managed to reach a new agreement with
the company by which the Firestone Plantations Company is now one
of the few companies in the country paying an income tax rate of
after the introduction of new tax rates in 1977.