Tax Expenditure Management Act Launched

The Department of Fiscal Affairs at the Ministry of Finance and Development Planning (MFDP), has officially launched the Tax Expenditure Management Act of 2025.

The enactment of the new Tax Expenditure Management Act of 2025, is a historic turning point for the first time, Liberia now has a comprehensive legal framework governing the application, approval, registration, administration, monitoring, evaluation and reporting of tax expenditures in all sectors of the economy.   

The Act seeks to promote transparency, equity and fiscal discipline, and as well consolidate the legal and institutional procedures for expenditure. It will also establish a system for managing both existing and new tax incentives granted through domestic laws, ratified agreements or international convention and treaties.

At the ceremony on Tuesday, July 7, in Monrovia, MFDP Deputy Minister for Fiscal Affairs, Anthony Myers defined the Fiscal Instrument as a landmark reform in Liberia’s journey toward strong fiscal governance, greater transparency and more accountable management of public resources. 

Myers said, the launched of the initiative should not just be seen as another law, but the celebration of the latest in a series of policy reforms that reflect government’s determination to modernize the tax system, strengthen public financial management and ensure that every tax incentive granted by government advances national development priorities, while safeguarding the public purse.

“Your presence here today demonstrates the broad national and international support for sound fiscal governance, and further reinforces the importance of partnership in building a stronger and more prosperous Liberia.”

Myers said, the program goal is achievable through domestic resource mobilization strategy that attracts new investment, and incentivizes expansion of existing ones without facilitating leakages, evasion and collusion.

He said, throughout the world, governments use tax incentives to attract investment, encourage industrialization, create employment opportunities, promote technology transfer and stimulate economic growth, and Liberia is no exception.

Myers said that investment incentives remain an important component of the economic development strategy that will continue to play a vital role in positioning Liberia as a competitive destination for responsible investment.

“Yet, every tax incentive has a cost. Every exemption, tax holiday, customs duty waiver, reduced tax rate, or preferential treatment represents revenue that government deliberately forgoes in pursuit of broader economic and social objectives. These foregone revenues are public resources, which deserved the same level of transparency, accountability, oversight and evaluation as every other public expenditure.”

Myers recalled how over the years, the tax expenditure regime has evolved through various provisions of the revenue code, concession agreements, investment contracts, executive orders, international treaties, donor agreements and sector-specific legislation.

He said, while those instruments contributed to investment promotion, they also created a single legal framework for registration, monitoring, reporting and evaluating the fiscal impacts of tax incentives.

“This law provides for the institutional foundation needed to ensure that tax incentives are granted transparently, managed responsibly, monitored consistently and reviewed periodically to determine whether they continue to deliver measurable economic and social development benefits. Among the landmark reforms introduced by this Act is the establishment of the first National Tax Expenditure Register, which is a centralized inventory of all tax incentives and exemptions granted under our laws.”

Mr. Myers told participants that the Register will improve transparency by identifying beneficiaries, recording the legal basis for each incentive, estimating revenue forgone and tracking the duration and performance of every approved tax expenditure.

He added: “Together, we must ensure that this law is implemented faithfully, transparently and consistently, in that way, the country will strengthen and increase investor confidence, improve fiscal transparency, enhance domestic revenue mobilization, and ensure that tax incentives becomes more strategic, accountable and aligned with our national development aspirations. As we officially launched the Tax Expenditure Management Act of 2025 today, let us reaffirm our shared commitment to responsible fiscal governance, sound public financial management and sustainable economic growth.”

The program was graced by scores of government officials, international partners and members of security sectors.

Macpherson C. Marbiah writes