 Liberia has enacted the Tax Amendment Act of December 2025, approved on 24 March 2026, introducing stronger tax enforcement powers, a 15% withholding tax on non-resident payments, higher goods and services tax measures, and increased excise duties on tobacco, alcohol and sugary beverages.
Liberia has enacted the Liberia Tax Amendment Act of December 2025 (the Act), approved on 24 March 2026. The Act introduces major revisions to the Liberia Revenue Code aimed at strengthening domestic revenue mobilisation and advancing public health objectives. It responds to changing economic conditions and seeks to align Liberia’s tax system with international best practices, particularly in relation to excise taxes on health-harming products and the taxation of non-resident enterprises.
Key enforcement and compliance measures
Security and seizure powers: The Commissioner General is granted expanded authority to secure tax payments. This includes the power to instruct the Land Registry to record interests in a taxpayer’s property for unpaid taxes and to recover outstanding amounts through distress and sale of movable property. The Commissioner may also seize goods where excise duty or value-added tax is suspected to be unpaid.
Departure prohibition orders: To prevent tax evasion, the Commissioner General may issue written orders prohibiting individuals under tax investigation from leaving Liberia. This may include the confiscation and retention of passports or other travel documents.
Classification of offences: Tax evasion is now classified as a felony, punishable by up to five years’ imprisonment and fines of up to 100% of the evaded tax. Other violations, such as failure to obtain a required licence or deliberate non-compliance with tax obligations, are treated as misdemeanours.
Assessment periods: The standard period for issuing tax assessments is seven years. This is extended to ten years where a taxpayer fails to file a required return or where withholding tax has not been applied.
Structural and specific tax changes
Permanent establishment: A “permanent establishment” for non-resident persons now includes situations where business activities, including consultancy and services, are carried out in Liberia for at least 30 days within a tax year.
Source of income and withholding tax: Income from the sale or licensing of industrial or intellectual property, including software used in Liberia, is now classified as Liberian-source income. A 15% withholding tax applies to payments to non-residents for interest, dividends, royalties, and licence fees.
Goods and services tax: The standard rate for both goods tax and services tax is set at 13%. An additional 5% surtax applies specifically to telecommunications services.
Excise tax adjustments: From 1 January 2027, specific excise rates on tobacco, alcohol, and sugar-sweetened beverages will be automatically adjusted each year in line with inflation and economic growth, based on the Consumer Price Index and Gross Domestic Product (GDP).
Tariff increases: The Act introduces significant increases in excise tariffs. For example, tax on imported and locally produced beer rises to USD 1.00 per litre, while the rate on unmanufactured tobacco increases to USD 25.00 per kilogram.
The Act took effect immediately upon its publication in handbills on 1 April 2026.
