Liberia - Taxation

The Before civil conflict began in Liberia, concession agreements negotiated between foreign interests and the Liberian government often provided tax exemption or modification for periods of 10, or more years after the start of operations.

A moderately progressive tax on net income earned from Liberian sources by individuals, partnerships, and corporations was the largest source of government revenue. Net income was taxed at rates ranging from 11% to a maximum of 65% on income over $99,000. Corporate tax rates ranged from 20% to 34% of taxable income with marginal rates of up to 50%.

An additional national reconstruction tax of up to 8% on income over $1,000, was imposed in 1981, and was still in effect in 1991. Also levied were a sales tax of 0.5%-2%, inheritance and gift taxes, and social security payroll taxes. In 2003, the violent chaos into which the society had descended while waiting on the international community to send aid made most questions about the tax regime irrelevant. In recent history, Liberia's wealth has been smuggled out, not taxed. In 1999, for instance, imports were improbably over three times reported exports, a sign that not all exports were being reported. Of the $60 million in tax revenue collected in 1999, only 22.4% came from income taxes on corporations and individuals. Sales taxes accounted for another 16%. The main sources of tax revenue have been import duties (almost 30%) and fees paid to Liberia's "flags of convenience" maritime registry. (more than 23%).

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