Accessing Special Incentives
Economic Empowerment Tax Amendment Act of 2016
Amendments to Section 16 and related amendments to Section 204 (d)
Investment incentives can be accessed by foreign and domestic investors for specific investment projects. Exemptions and allowable deductions are set out in Section 204 of the Economic Empowerment Tax Amendment Act of 2016.
Incentives are available for investments in the following sectors:
- Hospitals and medical
- Information Technology
- Agricultural – food crop cultivation and processing including cocoa and coffee
- Small and medium scale rubber and oil palm cultivation and processing
Capital Investment requirement:
- At least five hundred thousand (USD500, 000.00) for both foreign and domestic investors. If the investment is to establish a hospital or health clinic, the minimum capital invested must be at least USD50, 000.
Highlights of Investment Incentives:
- Manufacturing and service businesses, and businesses in sectors eligible for Section 16 investment incentives, are entitled to deduct an aggregate of up to 30% of the purchase price of a qualifying asset specified in paragraph (2)
- An incentive deduction with respect to an asset is permitted only for the tax period in which the asset is placed in service.
- The allowances provided in paragraph (2) may be combined with respect to an asset to reach the limit of 30%
- The amount deductible as an incentive deduction reduces the asset’s tax cost to arrive at the asset’s adjusted tax cost, which is added to the appropriate depreciation pool for the tax period in which the asset is placed in service
- Manufacturing and service businesses, 20% of the purchase price of equipment and machinery
- Manufacturing, agriculture processing, and service businesses (other than tourist facilities) located outside of Montserrado County, outside any Government-owned Industrial Free Zone, and outside any Industrial, 10% of the purchase price of equipment and machinery.
- A business providing tourist facilities, or transnational corporation that uses Liberia as its regional headquarters, 10% of the purchase price equipment and machinery
- A business in a sector qualifying for Section 16 investment incentives, 10% of the purchase price of equipment and machinery; specialized vehicles; capital spare parts, and other specialized capital goods, as specified by Harmonized System Codes in a regulation issued under Section 16, regardless of whether the business is conducting as investment activity that qualifies under Section.
- The incentives allowed, subject to the restrictions of subsection (a) are exemption from GST under Part III and import duty under Part V of:
- Medical and educational equipment and supplies purchased for the use directly in or in connection with the investment activity and intended to be placed in service within one year of purchase
- Equipment and machinery, specialized vehicles, capital spare parts, and other specialized capital goods that are purchased for use directly in the activity and intended to be placed in service immediately upon purchase, as specified in a regulation setting out the Harmonized System Code for each item permitted under this provision.
- Automobile, small trucks and fuel are prohibited from exemption under this provision
Requirement for application:
- Investment capital be not less than US$500,000
- Business Registration
- Articles of Incorporation
- Business Plan/Project Proposal
Address application to:
Hon. Molewuleh B. Gray
National Investment Commission
United Nations Drive