On 8 January 2016 the IMF published a staff report in connection with the extended credit facility arrangement with Liberia.

The IMF reports that poverty and food insecurity remain higher than before the Ebola crisis and that the commodity price shock is dampening the economic outlook. The economy was near to stagnation during the epidemic and will experience lower growth, exports and revenue paths as it recovers. Real GDP growth is estimated to have been 0.7% in 2014 and is projected at 0.3% in 2015 as production and investment are cut in commodity exporting sectors, especially iron ore and rubber.

Revenue collection is expected to increase in 2016 as a result of further tax reforms although these may be eroded by the request for relief by companies in the commodities sector. The Liberia Revenue Authority was established on 1 July 2014 as the new revenue collecting entity and delivered a strong improvement in revenue collection during the Ebola crisis. The projected tax revenue for 2015 was revised down owing to the Ebola crisis but the LRA collected more tax than budgeted. The tax to GDP ratio was 18.5% which was higher than projections.

The LRA faces challenges including the need to completed taxpayer registration to widen the tax base. A reform of the tax code is also required to support tax collection. Migration to the Standard Integrated Government Tax Administration System (SIGTAS) should be completed. The LRA also needs to strengthen tax payment control, including advance payments and the tax refund system.

Before the Ebola crisis the Fiscal Affairs Department of the IMF had launched an intensive technical assistance program and conducted remote tax administration support in various areas including organizational development, the LRA Project Implementation Plan, and the data integrity improvement project. Following the Ebola-free declaration technical assistance has continued, especially in connection with value added tax (VAT), human resource administration and audit capacity building.

The IMF notes that Liberia will be implementing the ECOWAS Common External Tariff following a delay caused by the Ebola crisis. The Protocol to the ECOWAS Trade Liberalization Scheme is awaiting ratification and Liberia is aiming to reach WTO membership by the end of 2015.

In its Memorandum of Economic and Financial Policies the Liberian government notes that in 2015 tax LRA was established. This increase was achieved despite the negative impact of the Ebola crisis on tax collection from the mining and telecommunications sectors. However the higher tax revenue was partly offset by a decline in non-tax revenue.

The Liberian government is considering intervention to support the commodity-producing sector in the light of the impact of the decline in world prices. Support measures could include postponement of collecting tax, royalties and social contributions due in the sector in 2016 until the following year. Compensating revenues would be found to offset the cost to the budget.

The IMF encourages the move towards strengthened revenue collection. The government should be cautious in giving relief to foreign companies that operate in the commodity sector and these should be approved only after thorough examination and assessment. Relief should be temporary, transparent, fair and publicly announced. Granting this relief depletes revenue so there should also be compensating revenue raising measures.