On 16 July 2019 the World Bank approved a grant to its International Development Association (IDA) to improve domestic revenue mobilization systems and strengthen financial control and accountability in public finances. The IDA provides grants and low interest loans for projects to boost economic growth and reduce poverty.
The IDA project will look at financial management and governance issues and deepen public finance management (PFM) reforms already achieved. It will address the need to broaden the revenue base fairly to create more room for government spending on education and health. Government transparency and accountability are also required to mobilise additional revenue and increase human capital development.
The creation of greater fiscal room requires a greater ability of PFM systems to provide relevant information on expenditure and requires control and oversight of government finances generally. The IDA project is aligned with Liberia’s medium-term development strategy and will concentrate on strengthening the legal and regulatory framework, mobilising government revenue, transparent financial reporting and external scrutiny.
The project will support Liberia’s efforts to improve its tax policy capacity and to enhance the tax base. The government is preparing to implement a broader based Value Added Tax (VAT) to replace the General Sales Tax (GST). It will also strengthen the financial controls and systems that will facilitate the introduction of the Integrated Financial Management Information System (IFMIS) across government ministries.
