Who is a Taxpayer?
A taxpayer is a person or organization (such as a company) subject to pay a tax. Modern taxpayers may have an identification number (TIN), a reference number issued by the LRA to citizens or firms.
A taxpayer is an individual or entity that is obligated to make payments to municipal or government taxation-agencies, in this case, Liberia Revenue Authority. Taxes can exist in the form of income taxes and/or property taxes imposed on owners of real property, along with many other forms. People may pay taxes when they pay for goods and services which are taxed.
The term “taxpayer” often refers to the workforce of a country which pays for government systems and projects through taxation. The taxpayers’ money becomes part of the public funds, which comprise all money spent or invested by government to satisfy individual or collective needs or to generate future benefits. For tax purposes, business entities are also taxpayers, making their revenues and expenditures subject to taxation.
What is a Tax Identification Number (TIN)?
A Taxpayer Identification Number is your primary source of Identification as a taxpayer. It is used to identify you with the Liberia Revenue Authority, and the Republic of Liberia as a whole.
It is a 9-digit number beginning with 5
Ex. 5********
According to Section 53 of the Liberia Revenue Code, every legal resident having a tax obligation within Liberia should have a TIN. It is given to every Taxpayer free of charge, and no taxpayer should have more than one TIN.
Tax Clearance Information
What is a Tax Clearance Certificate?
A tax clearance certificate is an instrument issued by the Liberia Revenue Authority (LRA) that certifies that a taxpayer has complied with all known tax requirements at the time of issuance.
How long does it take to get a Tax Clearance Certificate?
Normal processing time for a complete and accurate tax clearance certificate application is 1 to 4 working days. For incomplete applications (missing information, missing supporting documentation and/or outstanding tax liabilities) processing may take up to 5 working days. If all documentation and tax obligation issues are not settled within these 5 business days, a new application is required.
How much does it cost to get a Tax Clearance Certificate?
Tax Clearance Certificate is absolutely free.
Why do I need a Tax Clearance Certificate?
A Tax Clearance Certificate is required and useful when you want to:
- bid on or receive payment for a government contract
- clear goods in commercial quantities from a port of entry (as per Risk Profile)
- apply for a bank loan
- contest a public election
- obtain payment from government for the sale of goods and services
- traveling purposes
- apply for Duty Free (As per Risk Profile)
- confirm closure of a business entity
- effect export of goods from Liberia (As per Risk Profile)
- transfer Profit, Dividends, Interest and Royalties in excess of US$100,000.00 from Liberia to place or country outside of Liberia
- other activities that may necessitate the request for tax clearance
For how long is a Tax Clearance Certificate Valid?
There are six (6) kinds of Tax Clearances didvided into three (3) categories as follows:
- Conditional (Provisional) Tax Clearance: Provisional tax clearance certificates are issued to new business or businesses that are not fully tax compliant.
- 45 Days
- 60 Days
- 90 Days
- Regular Tax Clearance: Regular tax clearance certificates are issued to businesses that are fully tax compliant.
- 120 Days
- 180 Days
- Annual Tax Clearance: Annual tax clearances certificates are issued to businesses and individuals that have been audited and are fully complying with all the applicable tax laws and other relevant regulations.
- 360 Days
Taxpayer Bill of Rights
- Right to Pay Only The Correct Amount of Tax
All taxpayers are to receive the benefits, credits, and refunds to which they are entitled to under the law and to pay no more and no less than the correct amount required under the law. - Right to Privacy and Confidentiality
Taxpayers have the right to confidentiality of their information provided to the Liberia Revenue Authority (LRA). A taxpayer’s information will be used only for purposes allowed by law. Only those persons who are authorized by law, and who require the information to administer programs and legislation, have the right to access the personal and financial information of taxpayers. - Right to Professional, Courteous, Efficient, Transparent and Fair Service
Taxpayers are to be treated courteously and with consideration at all times, including when the LRA requests information or arranges interviews and audits. Integrity, professionalism, respect and cooperation are core values that reflect our commitment to giving taxpayers the best possible service. - Right to Complete, Clear and Timely Information
Taxpayers have the right to complete, accurate and timely information that will explain in plain language the laws, policies and procedures regarding obligations and entitlements. - Right to Consistent Application of the Law
The Revenue Code of Liberia Act of 2000 and all amendments including regulations pertaining thereto shall be applied consistently so that every taxpayer gets his/her/its entitlements and pays the legitimate amount. - Right to Appeal and Judicial Review
Taxpayers are entitled to a formal review if they believe that the Commissioner General or any officer has not applied the law correctly or that they have not received their full entitlements under the law. An Appeals Officer shall conduct a formal and impartial review. Filing an objection (an appeal in the case of assessments) will begin with an Appeals Officer. If the matter is not resolved to the taxpayer’s satisfaction, the taxpayer is entitled to appeal to the Board of Tax Appeals or Tax Court. - Right of Refusal to Pay the Full Income Tax Amounts in Disputes before you have had an Impartial Review
A taxpayer is required to make a partial payment of thirty percent (30%) of the tax amount in dispute excluding payment of interest and penalty pending the decision of the Board of Tax Appeals. After the review, if the Board of Tax Appeals finds the taxpayer’s protest to be contrary to the law or procedure, the taxpayer will be requested to make payment of the remaining seventy percent (70%) plus penalty and interest. If the Board of Tax Appeals finds the taxpayer objection or protest to be correct, the partial payment of thirty percent (30%) will be refunded and accrued interest will also be paid by the LRA. - Right to a Service Complaint and Redress
A taxpayer can expect that if he/she/it lodges a complaint about the service provided from the LRA, he/she/it will be listened to and given the opportunity to explain the situation.
The LRA will deal with all complaints promptly, impartially and in confidence, and it will provide a formal explanation of its findings. - Right to Notice on Audit
Any notice or document sent by tax authorities must be written, signed by an authorized tax official, noting the taxpayers’ last name, and must carry the official stamp of the Republic of Liberia. LRA will take into account the costs of compliance. when administering tax legislation. We recognize the need to minimize your cost including time. - Right to Expect the LRA to be Accountable
A taxpayer has the right to expect the LRA to be accountable for what it does. When a decision is made about a tax obligation, the LRA will explain that decision and inform the taxpayer about his/her/its rights and obligations in respect to that decision. - Right to Refunds and Claims
Taxpayers are entitled to receive the benefits, credits and refunds in accordance with the law. They may file a claim for refund if it is established that taxes have been overpaid. The claim must be filed within 3 years from the date you file your original return or 2 years from the date the tax is paid, whichever is later. The law generally provides for interest on the refund if it is not paid with in 45 days of the date the taxpayer’s return is filed or claim for refund is made. - Right to be Represented by the Person of your Choice
A taxpayer has the right to be represented by a person of his/her/its choice in the appeal process. However, decisions from such representation shall be legally binding.
Domestic Tax Education
Personal Income Tax (PIT)
What is a Personal Income Tax (PIT)?
A personal income tax is amount paid by an individual on a periodic basis from his/ her personal income.
What is the PIT table ?
The PIT table shows the different bands of income earners and their corresponding applicable marginal tax rate.
Personal Income Tax
| Band | From | To | Tax Rate | |
|---|---|---|---|---|
| 1 | - | 70,000 | 0% | of Gross Taxable Income |
| 2 | 70,001 | 200,000 | 5% | of Excess over 70,000 |
| 3 | 200,001 | 800,000 | 6,500 + 15% | of Excess over 200,000 |
| 4 | 800,001 | Above | 96,500 + 25% | of Excess over 800,000 |
How is PIT calculated? The PIT is calculated on the annual gross income which includes all of your cash and non cash benefits . Non cash benefits include vehicles, housing, gasoline coupons, etc. Pursuant to section 202-C, the Law allows for an annual exemption of L$100,000 on the aggregate market value of all non-cash benefits .
What is meant by an annual gross taxable income?
An annual gross taxable income is the summation of all monthly gross income for the year.
What is the difference between a marginal tax rate and an effective tax rate?
The difference between a marginal tax rate and an effective rate is that a marginal tax rate is the tax rate of the taxpayer’s band which is applied on the excess amount of his/her tax band and the effective tax rate is the actual tax rate levied on the taxpayer and is derived by dividing tax amount by earning before tax deduction.
What is the tax rate for a taxpayer who annual gross income is below the exemption threshold? For any taxpayer whose annual gross income is below the exemption threshold his /her tax rate is ZERO. Meaning no tax payment is required.
Is the New PIT table also applicable to contractors?
No. The New PIT table like the old table is only applicable to employees of both public and private sectors. Contractors of both public and private sector will continue to pay the 10% flat rate.
PIT Calculator
Business Income Tax (BIT)
For our quarterly payments in Liberia, the LRA uses the Presumptive Taxation Scheme for Businesses.
Presumptive taxation scheme (PTS) allows you to calculate your tax on an estimated income or profit.
The scheme can be used by all businesses in Liberia. The Quarterly Rate of 4% is applied to Small Tax Division, which are businesses having a total annual turnover of less than L$3,000,000 (three million Liberian Dollars) and the Quarterly Rate of 2% is applied to Medium & Large Tax Divisions, which are businesses having a total annual turnover of more than L$3,000,000 (three million Liberian Dollars) and more than L$30,000,000 (Thirty Million Liberian Dollars), respectively.
It is filed every Quarter, and the deadlines are as follows:
| Quarter | Duration | Deadline |
|---|---|---|
| Quarter 1 | January 1 - March 31 | April 15 |
| Quarter 2 | April 1 - June 30 | July 15 |
| Quarter 3 | July 1 - September 30 | October 15 |
| Quarter 4 | October 1 - December 31 | January 15 |
What Is Real Property Tax?
Real Property Tax is the tax paid ONCE a year on real property(ies) owned within the Republic of Liberia.
Real Property is immovable property. It is tangible fixed structure. Real Property include land and building and other fixed improvements to the land and/or building.
How Is Real Property Tax Determined?
Real Property Tax is the product of the Real Property tax rate and the current market value of your property in keeping with Section 2001(b) of the Revenue Code of Liberia Act of 2000. (herein referred to as the LRC)
Market value is the capital sum which land, building or improvements might be expected to realize as at the date of assessment if offered for sale on such reasonable terms and conditions as a bona fide seller would require.
Who Should Pay Real Property Tax?
- Owners of real properties are owners of land and/or buildings.
- Note that even if you own a vacant land, you are required by law to pay taxes for that land owned.
- Real Property Tax is paid by owners of real property(ies).
(In some lease agreements, owners of properties designate the lessee as responsible for the payment of the taxes, or the Lessee designates themselves as the responsible party, to ease negotiations or to facilitate bookkeeping.)
What are the Real Property Tax Rates?
Do I pay Real Property tax as a renter/tenant?
If you are renting a property, you don’t pay Real Property Tax. Instead, you pay a Withholding on Rental Income (10%).
When is Real Property Tax due?
- Real Property Tax is an annual tax and is paid once a year.
- Real Property Tax is due between January 1st to July 1st of the year in which the tax is levied.
- After July 1, the payment is considered late and starts to accrue penalty and interest in keeping with Section 2002 of the LRC.
What happens if my Real Property Payment is after the deadline?
After July 1, the payment is considered late and starts to accrue penalty and interest in keeping with Section 2002 of the LRC as follows:
“Penalty of 5% for each month elapsing after July 31st that the tax remains unpaid but not to exceed 25% Interest at the market rate as published by the Central Bank of Liberia”
How Do You Pay Real Property Tax?
- Obtain a Tax Identification Number (TIN);
- Obtain Valuation of your Property
- File a Schedule of your property(ies)
- Fill in Declaration/Registration Form. Based on the Valuation and Classification of your property, your tax bill is calculated
- Payment of your Real Property Tax in the GOL’s General Revenue Account.
Please note that with the Calculator you can estimate your yearly tax obligation using the fair market value of the property. However, the true value of your property may depend on other features of the property that you may not have factored in your estimation.
Monthly
Withholdings
Monthly Withholding Taxes
| Tax Type | Tax Rate | Due Dates |
|---|---|---|
| Personal Income Tax (PIT) | See PIT Table | Due by 10th day of suceeding month. |
| W/H on Wages/Salary | See PIT Table | Due by 10th day of suceeding month. |
| W/H on Rent | Resident 10% | Due by 10th day of suceeding month. |
| W/H on Rent | Non-Resident 15% | Due by 10th day of suceeding month. |
| W/H on Interests and Dividends | 15% | Due by 10th day of suceeding month. |
| Board & Management Fees | Resident 10% | Due by 10th day of suceeding month. |
| Board & Management Fees | Non-Resident 15% | Due by 10th day of suceeding month. |
| W/H on Payment for Services | 6% | Due by 10th day of suceeding month. |
| Contracts on Services Rendered | 10% | Due by 10th day of suceeding month. |
| Gambling | 20% | Due by 10th day of suceeding month. |
| Excise Tax | (See Excise Table) | Due by 21st day after month ends. |
| Goods & Services Tax | (see GST Table) | Due by 21st day after month ends. |
Royalties
| Tax Type | Tax Rate | Due Dates |
|---|---|---|
| Iron Ore | 4.5% | Due dates per Mineral Development Agreement or Contract. |
| Gold | 3% | Due dates per Mineral Development Agreement or Contract. |
| Commercial Diamonds | 5% | Due dates per Mineral Development Agreement or Contract. |
Quarterly
| Tax Type | Applies to | Tax Rate | Due Date |
|---|---|---|---|
| Presumptive Tax (Advance Payment) | (Small Tax Division) | 4% | Due within 15 calendar days following the end of each quarter. |
| Advance Tax (Minimum Tax) | (Medium and Large Tax Divisions) | 2% | Due within 15 calendar days following the end of each quarter. |
Annually
| Tax Type | Tax Rate | Due Dates |
|---|---|---|
| Real Property Tax | (See Real Property Table) | January 1 to June 30 |
| Personal Income Tax | Three months after end of calendar or fiscal year. | |
| Corporate Income Tax (Regular) | 25% | Three months after end of calendar or fiscal year. |
| Mining | 30% | Three months after end of calendar or fiscal year. |
| Petroleum Project | 30% | Three months after end of calendar or fiscal year. |
| Rice Production | 15% | Three months after end of calendar or fiscal year. |
What is Excise Tax?
Excise Tax is a commodity based tax that is levied on excisable goods and services. It is levied on the production, importation of excisable goods and the provision of excisable services.
All excise taxes are calculated on the Cost + Insurance + Freight (CIF) of imported goods except for alcoholic beverages and tobacco product, and ex-factory price for local manufactured goods.
How is the Excise on alcoholic and non-alcoholic imported and locally manufactured beverages and tobacco products calculated?
For alcoholic and non-alcoholic imported and locally manufactured beverages and tobacco product:
Customs Education
What are the procedures for importation?
- Fill out an electronic declaration, and attach scanned copies of required documents.
- Submit your declaration.
- Customs does a Compliance review and validation of your declaration.
- You receive an electronic payment notice if your declaration approved
- Make your Payment
- Terminal operator receives a Release Order after payment is made.
- Terminal operator releases shipment
- Customs does a final Electronic Clearance
What are the Required Documents for importation?
Required Documents for Imports
- Commercial invoice
- Packing list
- Bill of laden or airway bill
- Clean Report of Findings
What is Temporary Importation?
What are the procedures for Temporary Importation?
Step 1. Registration of electronic declaration (Including attachment of scanned required
documents) by declarant
- Automatic selectivity triggered by the system
Step 2. Compliance review and validation of declaration by Customs
- Automatic electronic payment notice to declarant
Step 3. Payment by declarant
- Automatic release order to terminal operator
Step 4. Release by terminal operator
Step 5. Final electronic clearance by Customs
What are the required documents for temporary importation?
Required Documents for Imports
- Commercial invoice
- Packing list
- Bill of laden or airway bill
- Guarantee (150% of estimated duties & taxes)
What are the procedures for warehousing?
Step 1. Registration of electronic declaration (Including attachment of scanned required documents) by declarant
- Automatic selectivity triggered by the system
Step 2. Compliance review and validation of declaration by Customs
- Automatic release order to terminal operator
Step 3. Release by terminal operator
Step 4. Electronic clearance for warehousing by Customs
What are the required documents for warehousing?
Required Documents For Warehousing
- Commercial invoice
- Packing list
- Bill of laden or airway bill
- Clean Report of Findings
- Guarantee (150% of estimated duties & taxes)
What are the procedures for transit?
Step 1. Registration of electronic declaration (Including attachment of scanned required documents) by declarant
- Automatic selectivity triggered by the system
Step 2. Compliance review and validation of declaration by Customs
- Automatic electronic payment notice to declarant
Step 3. Payment of transit fee by declarant
- Automatic release order to terminal operator
Step 4. Release by terminal operator
Step 5. Electronic clearance for transit by Custom
What are the required documents for transit?
Required Documents for Transit
- Commercial invoice
- Packing list
- Bill of laden or airway bill
- Guarantee (150% of estimated duties & taxes)
What are the procedures for doing a manual declaration at a land border?
Step 1. Registration of manual declaration (Including attachment of scanned required documents) by declarant
Step 2. Compliance assessment and billing by Customs
Step 3. Payment by declarant
Step 4. Final clearance by Customs
What are the required documents for manual declaration at land border?
Required Documents for Transit
- Commercial invoice
- Packing list
- Bill of laden or airway bill
- Guarantee (150% of estimated duties & taxes)
What are the procedures for export?
Step 1. Registration of electronic declaration (Including attachment of scanned required documents) by declarant
- Automatic selectivity triggered by the system
Step 2. Compliance review and validation of declaration by Customs
- Automatic electronic payment notice to declarant
Step 3. Payment of export fee by declarant
- Automatic export clearance to terminal operator
Step 4. Loading by terminal operator
What are the required documents for export?
Required Documents for Export
- Commercial invoice
- Packing list
What are the procedures for re-export?
Step 1. Registration of electronic declaration (Including attachment of scanned required documents) by declarant
- Automatic selectivity triggered by the system
Step 2. Compliance review and validation of declaration by Customs
- Automatic electronic payment notice to declarant
Step 3. Payment of re-export fee by declarant
- Automatic re-export clearance to terminal operator
Step 4. Loading by terminal operator
What are the required documents for re-export?
Required Documents for Re-export
- Packing list
- Customs clearance documents at the time of importation
Harmonized Systems (HS) Code
What is the HS Code?
The Harmonized System is a standardized numerical method of classifying traded products. It is used by customs authorities around the world to identify products when assessing duties and taxes and for gathering statistics.
Harmonized System (HS) Codes are commonly used throughout the export process for goods.
Why does Liberia use the HS Code System?
The HS is administrated by the World Customs Organization (WCO) and is updated every five years. It serves as the foundation for the import and export classification systems used in the Liberia and by many trading partners.
The HS assigns specific six-digit codes for varying classifications and commodities. Countries are allowed to add longer codes to the first six digits for further classification.
What is Duty Free?
Who does Duty Free apply to?
- Legislators / Members of the Supreme Court Bench
- GOL Ministries & Agencies
- Concessions & Investments
- Executive Orders
- Public Corporations
- Non-Governmental
- Diplomatic Missions
- Medical Institutions
- Educational
- Religious Institutions
What items does Duty Free apply to?
Legislators / Members of the Supreme Court Bench
GOL Ministries & Agencies
Concessions & Investments
Executive Orders
Public Corporations
Non-Governmental
Diplomatic Missions
Medical Institutions
Educational Institutions
Religious Institutions
Legislators / Members of the Supreme Court Bench
GOL Ministries & Agencies
Concessions & Investments
Executive Orders
Public Corporations
Non-Governmental
Diplomatic Missions
Medical Institutions
Educational Institutions
Religious Institutions
Who can use the ASYCUDA System?
The system can be accessed for clearing imported consignments at automated ports by importer(s) that request and obtain access to ASYCUDA World (the automated used by Customs), or use an approved licensed broker with access to ASYCUDA. Authorized LRA and Customs officers also have access to the system.
How can I verify that my customs broker/agent has given me the correct bill?
All bills pertaining customs declarations made by importers or their agents are stored electronically at automated Customs ports or manually at Customs ports not automated. The importer may request LRA Customs to retrieve the declaration and payment record.
Access our ASYCUDA Platform
ASYCUDA (Automated SYstems for CUstoms DAta) is a computerized Customs management system which covers most foreign trade procedures. The system handles manifests and customs declarations, accounting procedures, transit and suspense procedures. It generates trade data that can be used for statistical economic analysis. The ASYCUDA software is developed in Geneva by UNCTAD.
ASYCUDA takes into account the international codes and standards developed by ISO (International Organization for Standardization), WCO (World Customs Organization), eg. Data Model, and the United Nations. It can be configured to suit the national characteristics of individual Customs regimes, National Tariff & legislation. ASYCUDA provides Electronic Data Interchange (EDI) between traders and Customs using prevailing standards such as XML.
Customs Brokers are integral to the facilitation of trade and movement of goods and services across borders. The Business of Customs Brokers encompasses all activities, dealings, engagements and representation with LRA or any of its officers or employees in respect of customs clearance and forwarding.
Who is a customs broker?
A Customs Broker is any natural and /or legal person (partnership, association, or corporation) authorized and licensed by the Liberia Revenue Authority (LRA) to render valuable services to importers and exporters.
What does a customs broker do?
The activities or business of Customs Brokers include but are not limited to:
- Filing of documents
- Declarations on importations and exportations
- Corresponding and communicating with the LRA
- Providing written advice with respect to any individual or entity, transaction, plan, or arrangement having a potential for tax avoidance or evasion
- Representing a client or any third party at conferences, hearings, and meetings
Who can become a customs broker?
Any natural person (individual) who is a Liberian citizen and is 18 years of age and above can become a Customs Broker.
What are the requirements for an individual (natural person) to become a customs broker?
- Complete a Customs Broker licensing application form and submit online or in person, along with two passport sized pictures and a valid government issued identification card (Driver License, Social Security ID, Passport or Voters Registration card)
- Must have the requisite technical knowledge and/or skills required of a customs broker acquired by training and/or practice
- Must sit and pass a Customs Brokers Competency Examination to be administered by the Liberia Revenue Authority (LRA)
- Possess a valid Tax Identification Number (TIN)
- Possess a valid Tax Clearance Certificate and remain tax compliant
- Be free of criminal conviction and provide a valid Police Clearance
- Pay a licensing fees as provided for in Regulation promulgated by the Ministry of Finance and Development Planning under Section 2111 of the LRC relating to Fee Structure for Occupational and Professional Business Licensing
How much should I pay for the application form?
The Customs Brokers License application form is available free of charge.
Will I pay for the customs broker license?
Yes. The amount to be paid for the Customs Broker License is provided for in the Regulation promulgated by the Ministry of Finance and Development Planning under Section 2111 of the LRC relating to Fee Structure for Occupational and Professional Business Licensing.
What is the duration of a customs broker license?
The validity period for a Customs Brokers License will be Initial one year. It will be renewed thereafter and could be extended for one or more years based on the Customs Brokers risk profile. However, no license validity period will exceed three years.
How do I acquire the technical competence to become a customs broker?
- Be trained by the LRA
- Take advantage of LRA online self-study
- Any other customs brokers training
What are the requirements for a business entity (legal person) to be licensed as a customs brokerage firm?
- For Sole Proprietorship, at least one person (the proprietor/owner) must be a licensed Customs Broker (natural person); For all other business entities (partnership, association and corporation) at least two (2) officers, members, agents or employees must be a licensed Customs Broker (natural person)
- Must have a valid Business registration and/or Article of Incorporation and any other legal business formation documents
- Possess a valid Tax Identification Number (TIN)
- Possess a valid Tax Clearance Certificate and remain tax compliant
- Must secure an indemnity bond as follows
- Sole proprietorship – US$5,000.00 (Five Thousand United States Dollars)
- Partnership: US$10,000.00 (Ten Thousand United States Dollars)
- Corporation or Association: US$15,000.00 (Fifteen Thousand United States Dollars)
- Pay a licensing fees as provided for in Regulation promulgated by the Ministry of Finance and Development Planning under Section 2111 of the LRC relating to Fee Structure for Occupational and Professional Business Licensing
Where can I obtain a customs broker application form from?
A Customs Brokers License application form is available and can be downloaded from the LRA website. It can also be obtained from the ground floor of the LRA Headquarters and at the Customs Business Office – Free Port of Monrovia.
