83% of foreign companies enjoy tax relief compared to 17% of Liberian-owned businesses
A report from the National Investment Commission (NIC) on the beneficiaries of Special Tax Investment Incentives to the House of Representatives showed that about 83% of foreign-owned businesses in Liberia enjoy tax relief, as compared to 17% of Liberian-owned businesses.
Members of the House of Representatives are considering passing a law to encourage more Liberian businesses to take advantage of the Special Tax Investment Incentive.
A Special Tax Investment Incentive is a scheme which provides for tax relief of a certain percentage for investments made in some sectors.
According to Section 16 of the Consolidated Tax Amendment Act of 2011, “To be qualified for the Special Tax Investment Incentive, under section 16(a), investors qualifying under subsection (2) shall make application to the NIC which shall conduct an economic evaluation of the business plan and make recommendations to the Minister for certification of the investment…”
Accordingly, the sectors which are to benefit from the Special Investment Incentive are: tourism, tourist resorts, hotels and cultural sites, energy, hospitals and medical clinics and air, sea, rail and road transport infrastructure, including ports and manufacturing of finished products with at least 30% local material excluding water. Other applicable sectors include information and communication technology, banking in the unbanked areas in the southeastern region, poultry, horticulture, exportation of sea products, agricultural food crop cultivation and processing, including cocoa and coffee, small and medium scale oil palm cultivation and processing, waste management and manufacturing or assembly of finished products for export, provided that at least 70% of production is exported from Liberia within any 12-month period.
Some of the businesses who benefited from the Special Investment Incentive for 2014 included Fouani Brothers Corporation, Medina Rock Crushers, West Africa Telecommunications, TIBA International, Global Energy Solutions, Enisul and Edgail, among others.
Meanwhile, the NIC has been mandated to work along with four committees to update the House of Representatives with a comprehensive report on Special Tax Incentives to businesses. The committees are Ways, Means, Finance and Development Planning; Public Accounts; Public Utilities; and Investment and Concession.
Meanwhile, NIC chairperson Etmonia David Tarpeh and executive director George Wisner were mandated on Tuesday to work along with the committees, when they were summoned to answer why they should not be held in contempt for repeatedly failing to appear before the Committee on Concession and Investment.
Members of the House unanimously voted in favor for NIC to work along with the Joint Committee.
Plenary’s decision was sparked by the submission of an “Incomplete Report on Special Tax Incentives” to the House’s Committee on Concession and Investment.
Also, NIC chairman Tarpeh rendered her sincere apology to the lawmakers for the NIC’s failure to attend the committee’s hearings.
The NIC chief assured the House that such an attitude would not be repeated.