The_Open_Door_deel1

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situation renders the Treasury very vulnerable. The involvement
of a revenue source based on depletable natural resources (in
this case: iron ore) makes this dependency even worse. It is most
remarkable that only two foreign companies made significant tax
payments. In a period of less than twenty years at least forty
foreign companies concluded concession agreements with the
Government. Their number may even be higher as no complete list
exists of concession agreements signed and these forty agreements
were the ones that could be traced (more precisely, two of them
were Statements of Understanding between the Government of
Liberia and foreign investors). Among these agreements were 11
mining concessions, 7 agricultural concessions, 6 lumber
concessions, 5 concessions for agro-industrial purposes, 4
industrial concessions and 6 others.
Furthermore, in 1960 there were nearly 1,200 foreign corporations
registered in Liberia (under the Corporation Law of 1948) (23).
The Liberian Corporation Law of 1948 offers a tax-haven to
foreign companies which are registered in Liberia but which
operate outside this West African country- By agreement between
the Government and the U.S. company International Trust Company
(I.T.C.) the latter collects the fees which these companies must
pay for the tax facility. The Government in this period paid
I.T.C. 12B? commission for services rendered. As the impact of
the Corproation Law of 1948 on the economic development of
Liberia is virtually limited to its revenue generating aspect no
further elaboration will follow in this respect. These companies
exist only on paper for the Liberian economy.
The International Trust Company not only serves as statutory
agent for foreign businesses incorporated in Liberia under the
1948 Corporation Law but also acts as the .Government's maritime
administrator (see also Chapter 4)« Under an agreement made in
1949 between the Government and I.T.C the latter collects all
fees due by the owners of the ships registered under the
Liberian flag. For these services I.T.C. received 27% of all
fees collected (until 1975 when the agreement was revised and
I.T.C. 's share was reduced to 20%) (24). What was previously
stated in respect of the Corporation Law of 1948 also applies to
the Maritime Law. Therefore no further elaboration will follow
here although the financial impact of the Maritime Programme far
exceeds that of the 1948 Corporation Law. It is sufficient to
mention here that by 1959 Liberia ranked third among the world's
maritime nations (25). This achievement was the exclusive result
of the flag-of-convenience policy.
In fiscal terms the Open Door Policy yielded less in this period
than could be expected. This was due mainly to the nature, if
not the absence, of the tax provisions in the concession agreements.
Also the fact that a large number of concessions did not
reach the stage of production contributed greatly to the low income
receipts of the Government from the concession sector.