Assessing The Impact of Tax Incentives on the Government Revenue in Liberia’s Mining Sector

Abstract

This dissertation examines the impact of tax incentives on government revenue in Liberia's mining sector. It assesses the effectiveness of these incentives in promoting investment, economic growth, and job creation while aiming for sustainable development and adequate revenue for public services. The study explores the various incentives and subsidies created by the Government of Liberia (GOL) through provisions in various incentive agreements in the mining sector. It aims to ensure that tax expenditures or conventional expenditures provide the most cost-effective approach to delivering policy goals rather than resulting in dwindling tax revenues and overall fiscal distortion.

The research sets out the objectives for structuring fiscal regimes in the mining sector and analyses the different forms in which special taxes may be imposed in concert with the Liberia Revenue Code (LRC) and the challenges faced in awarding concession agreements. The importance of the mining sector in the Liberian economy and the special taxation regimes imposed in some concession agreements are discussed as examples of the application of different fiscal regimes and their potential negative effects on Liberia's ability to mobilize revenue from the sector effectively.

The study concludes with recommendations for realigning tax policies in the mining sector to enhance economic growth, increase government revenue, attract investment, and ensure sustainable resource management. The research provides a comprehensive analysis of the current tax incentive framework and its implications for Liberia's development.