In an effort by the government to streamline and provide a legal and regulatory framework to guide the award of duty and tax exemptions, the parliament of Sierra Leone has enacted the Tax and Duty Exemption Act 2023.
The Tax and Duty Exemption Act 2023 has consolidated the legal framework for regulating and administering exemptions in Sierra Leone.
This Act not only takes cognisance of Sierra Leone’s international obligations and the need to promote national policy objectives, such as driving investment into specific sectors, increasing exports, promoting job creation, creating value addition as well as increasing production, but it also includes to rationalise our current exemptions privileges, introduce sanctions to limit discretion and potential abuse, and where necessary consolidate existing statutory provisions relating to exemptions for efficient administration and enhancement of domestic revenue.
Other noteworthy clauses include the provision of exemptions for caring and support to persons with disability and emergencies; imports and procurement of all goods and equipment for protecting, safeguarding, and upkeeping a wildlife conservation zone, such as the Tacuguma Chimpanzee Sanctuary.
Presenting the bill to parliament, Deputy Minister of Finance Bockarie Kalokoh stated that it will develop a modern tax incentive regime that is consistent with local, regional and international laws and standards, improve transparency and accountability in the process of administering tax exemptions, reduce leakages through abuse of exemptions thereby increases the country’s revenue base.
He further stated that this new Act will support the government’s objective to increase domestic revenue mobilisation from 13.61% of GDP in 2022 to 20% by 2027.
Increasing revenue mobilisation through the reductions of leakages is one of the key commitments in the New Direction manifesto.
This commitment was also manifested in Executive Order No. 1, published on 19th April 2018, a study on the patterns of duties and tax exemptions, the development of a Tax and Duty Waiver Policy approved by cabinet and now enactment of the Duty and Tax Exemptions Act 2023.