The Liberian government has announced a comprehensive set of tax reforms aimed at generating additional revenue equivalent to approximately 1 percent of the country’s GDP.
Designed to bolster its national budget for 2025, the plan is  in alignment with the recently agreed framework with the International Monetary Fund (IMF),
The new tax measures have been designed to enhance government revenues and ensure fiscal sustainability in the face of ongoing economic challenges. Key components of the proposed tax strategy were outlined in the IMF first review of the country’s program
Among the major adjustments outlined in the 2025 budget plan are:
- Increase in Goods and Services Tax (GST): The government plans to amend the GST law to elevate the standard rate from 10 percent to 12 percent for goods and services currently taxed at the lower rate. This change is expected to enhance tax collection efficiency.
- Reintroduction of Petroleum Surcharge: A petroleum surcharge of US$0.20 will be reinstated, set to take effect on March 21, 2025, when the current suspension runs out. This measure is intended to increase public revenue from one of the nation’s crucial energy sectors.
- Minimum Corporate Income Tax Enforcement: In a bid to boost corporate contributions, Liberia plans to strictly enforce a minimum corporate income tax on a quarterly basis, ensuring that all businesses contribute their fair share to the national coffers.
- Tax Collection at Import Stage: Transitioning to a model where all taxes on imported petroleum products are assessed at the import stage is anticipated to combat under-declaration and smuggling, practices that have historically undermined revenue collection.
- Elimination of Fuel Tax Exemption: The government will abolish a generous fuel tax exemption previously enjoyed by a major mining company, leveling the playing field for all industry players and increasing state revenue.
- Personal Income Tax (PIT) Improvements: Enhanced administrative measures will be implemented to improve the withholding of personal income tax, leading to more streamlined and effective collection processes.
The Liberian government has been transparent about the objectives of these measures. Increased revenues will be devoted to various sectors, including infrastructure, health, education, and public safety, thereby fostering sustainable development and improving the quality of life for Liberians.
The government is also urging citizens and businesses to support the initiatives, highlighting that the funds generated will be pivotal for national development and economic stability.
