By Festus Poquie
Liberia missed roughly US$240 million in government revenue in 2024 because of generous tax exemptions granted to multinational firms, mainly in the mining sector, the International Monetary Fund (IMF) said in recent report, warning that the leakages undermine public spending and deepen aid dependence.
According to the IMF citing the authorities’ 2024 tax-expenditure report, the forgone revenue is equivalent to about 5 percent of GDP. The lender urged “strong political action” to scale back tax incentives, tighten tax administration and broaden the tax base to fund priority public services.
The IMF said the postponement of VAT implementation to 2027 after USAID departure creates an unexpected revenue shortfall for 2026.
The aid cut and the delayed tax reform will weigh on this fiscal year’s budget, the Fund said forecasting the 2026 budget gap at roughly 0.8 percent of GDP (about US$45 million).
President Joseph Boakai and the legislature have agreed on a $1.2 billion national budget for the 12-month period end Dec. 31, 2026. It is not clear if the budget underpins the IMF assumptions.
IMF proffered the following recommendations:
- Reduce generous tax expenditures, especially those granted to mining concessions; these incentives accounted for the bulk of the US$240 million forgone revenue.
- Raise the GST standard rate to 15 percent to support a smooth transition to VAT at the same rate in 2027.
- Reform personal and corporate income taxes to broaden the base and increase progressivity.
- Address tax-administration weaknesses through technical assistance, staff training and taxpayer-awareness programs to ensure a level playing field.
The call for reform comes amid strong profits reported by major mining firms operating in Liberia. ArcelorMittal reported a stronger-than-expected global first-quarter 2025 core profit (EBITDA) of US$1.58 billion, highlighting record iron ore production and shipments from its Liberian operations—8.4 million tonnes produced and about 8 million tonnes shipped in 1Q 2025.
The company said operational momentum continued into the third quarter of 2025, with combined production and shipments from its Mont Wright and Liberia operations reaching 8.5 million tonnes and 8.2 million tonnes, respectively.
Former Mines and Energy Minister Wilmot Paye have argued publicly that Liberia’s mineral wealth is vastly underleveraged. He put the potential value of the Turkish-owned Bea Mountain Mining Company (BMMC) gold concession at roughly US$40 billion and estimated iron ore deposits along the Yekepa–Buchanan corridor could be worth about US$1.7 trillion.
Paye also noted that BMMC generated about US$31 million in gold revenues in one week in March 2025 —equivalent to US$1.6 billion a year, or roughly US$40.3 billion over 25 years. He said proceeds at that scale could finance infrastructure, education and power projects without resorting to loans or foreign aid.
