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Tax Policy and Government Incentives

Investment incentive code. Liberia has a liberal business climate intended to attract foreign investment and stimulate economic growth and development. Incentives granted under the Investment Incentive Code include exemption from custom duties, income tax, stamp fees and other benefits to new and expanding businesses, and for approved investment projects in manufacturing, agriculture, forestry, fishing, mining, building and construction, transport and communication. Approved investment projects may also be eligible for support in securing loans and guaranteeing credit by the Central Bank.

  • Exemptions from Trade Taxes:
    • Machinery, equipment, raw materials, semi-finished products and other supplies to be used in a project are exempt from import duty up to 90% of their dutiable value; and
    • Manufactured goods exported from the production of the project are entitled to full rebate on import duties and full refund of both income tax and excise tax.
  • Exemptions from Income Tax:
    • Reinvested profits are exempt from income tax.
    • Profits not reinvested are exempt from 50% of the income tax otherwise payable.
  • Other benefits:
    • Approved investment projects may receive certain additional benefits on application to the government, such as the lease of land in government-owned industrial parks at a preferential rate, reasonable tariff protection, purchase of project products by government agencies, etc.

Tax regime for energy. Currently the application of existing exemptions to energy is not clear. Applicable taxes can reach 25% (e.g. in the case of Solar Portable Lamps) and may further increase the already significant investment identified above – which did not include tax. A tax regime for rural electrification and renewable energy investments will be developed to limit import duties and Goods and Services Tax (GST) impact on the total investment and funding required. The future regime will also include tax exemptions for private sector investment on energy in order to incentivize private and commercial funding.