On 5 June, the Ministry of Finance and Development Planning has announced with immediate effect the resumption of the processing of Investment Incentives Certificates in consonance with Section 16 of the Liberia Revenue Code.
Pursuant to its overarching objectives of curtailing waste, abuse, and misuse, and ensuring fiscal probity, the Ministry further announces, that in addition to the requirements as stated in Section 16 of the Revenue Code, the following administrative steps would be taken to ensure that the intended objectives of the investment incentives regime are achieved by streamlining the processes and procedures to enhance Government’s Domestic Resource Mobilization Strategy:
1. All applicants for investment incentives are encouraged to procure raw materials and other inputs locally. By this, no incentive holder will receive a duty waiver for goods that are readily available on the local market. This is intended, among other things, to help enhance local consumption, facilitate trade, and reduce pressure or demand for foreign currency.
2. Furniture, fixtures, office supplies, stationery, petroleum products (excluding HFO), water, toiletries and detergent, and certain types of vehicles (Sedans and SUVs) will not qualify for duty waiver under the investment incentive regime.
3. Prior to issuing the Section 16 incentive certificate, the final list of duty waiver items must be sent to the Liberia Revenue Authority to ensure that the Harmonized System Code is aligned with the intended industry use.
4. Spare parts for machinery and equipment would be granted 50 percent incentive waiver instead of 100 percent as was previously done.
5. A minimum deposit requirement of fifty thousand United States Dollars (US$50,000,00) be deposited with a local bank in an account owned by the investor prior to the granting of an incentive certificate. Note: This minimum deposit requirement does not apply if the investment is to establish a hospital or health clinic.
6. A biennial review of incentive certificate holders to ensure that the intended objectives are attained, the frequency of inactivity is reduced, and ensure that EXPIRED investment incentives certificates are not renewed, except as provided for in section 16, subsection 4 (A), (B) and (C) of the Liberia Revenue Code.
Furthermore, as a measure of tightening potential loopholes, effective August 01, 2020, a REBATE system will be implemented to minimize the abuse of duty waiver on hard-to- administer goods, such as petroleum and sugar. Toward this end, an administrative regulation would be issued to provide guidance. Additionally, Section 6.0 of the Standard Operating Procedures for Duty-Free would be amended to include petroleum products and sugar.
Finally, to effectively analyze, compute, and report tax expenditures, a monitoring and reporting framework is hereby instituted with the objective of ensuring that all tax expenditures are accounted for and reported accordingly.