By Amos Harris
The Liberia Revenue Authority (LRA) has reported a US$22.03 million revenue shortfall for the first quarter of Fiscal Year 2025 (January to March 2025), collecting US$179.63 million against a target of US$201.66 million. This 11% deficit was attributed to underperformance across key tax categories and delays in implementing major policy reforms. Despite this setback, the LRA emphasized that the quarter served as a transformative period, laying the groundwork for stronger performance in the coming months.
Both tax and non-tax revenues contributed to the shortfall. Tax revenue totaled US$145.15 million, falling 9% below target, while non-tax revenue amounted to US$34.47 million, a 17% shortfall. The Domestic Tax Department saw a 14% underperformance, largely due to disappointing returns from Personal Income Tax, administrative fees, and other income-based levies.
While several revenue streams fell short of expectations, there were areas of notable improvement. Corporate Income Tax slightly outperformed projections by 4%, and taxes on international trade marginally exceeded targets. A standout category was fines, penalties, and forfeits, which skyrocketed to US$5.04 million, a staggering 3,837% overperformance compared to the modest target of US$128,000. This significant increase is credited to enhanced enforcement mechanisms and stricter compliance oversight.
However, the LRA flagged persistent underperformance in property income and contributions to the Road Maintenance Fund. These remain key areas of concern, indicating weaknesses in inter-agency coordination and enforcement capacity.
Despite the fiscal gap, LRA officials characterized the first quarter as a critical turning point for institutional reform. The period saw the rollout of sweeping legislative amendments passed in December 2024. These changes to the Liberia Revenue Code, set to take full effect in the second quarter of FY2025, include:
- Revised audit timelines
- Introduction of presumptive taxation
- Updated excise tax structures
- Stricter transfer pricing regulations
These reforms are designed to modernize Liberia’s tax policy framework and expand the country’s tax base. To prepare taxpayers and businesses, the LRA launched a wide-ranging public education campaign, utilizing radio discussions, flyers, town hall meetings, and targeted consultations.
“The underperformance in Q1 is a wake-up call, but it is also a reflection of the transitional efforts we are undertaking,” a senior LRA official stated. “We are confident that the digital systems we are rolling out, combined with the legal reforms and increased public awareness, will significantly improve revenue outcomes in the coming months.”
The Authority also reported major strides in its digital transformation strategy, particularly in extending connectivity and digitizing key revenue functions. The deployment of Starlink satellite internet to remote county and tax business offices is a crucial step toward fully implementing the Liberia Integrated Tax Administration System (LITAS) and the Automated System for Customs Data (ASYCUDA World). Both systems aim to streamline tax administration and customs processing, reduce human interference, and improve compliance.
Additionally, the LRA expanded its e-payment infrastructure in collaboration with commercial banks, simplifying payment procedures and enhancing transparency in financial transactions and reconciliation.
Even with these advances, the LRA acknowledged persistent structural and operational challenges. These include logistical constraints in rural areas, limited technical capacity in audit and risk management, and low compliance levels in the informal sector. The Authority also pointed to delays in implementing critical policy reforms, originally scheduled for January but postponed to April, as a key factor in the Q1 shortfall. Another contributing element was the failure of several State-Owned Enterprises (SOEs) to meet their revenue commitments, significantly impacting overall collection.
Despite the rocky start, the LRA expressed optimism about meeting its annual target of US$804 million in domestic revenue. As of June 30, the midpoint of the fiscal year, the Authority reported collecting over US$400 million, approximately 50% of the annual target.
“The shortfall in Q1 was unfortunate, but we’ve already seen a turnaround in Q2,” the official confirmed. “We exceeded our Q2 projections, and this strong performance gives us confidence that we will meet our FY2025 goal.”
Comparing year-on-year performance, the Authority noted a US$5 million improvement in Q1 revenues compared to the same period in FY2024, suggesting a gradual upward trajectory.
The LRA reaffirmed its commitment to supporting President Joseph Boakai’s Arrest Agenda for Inclusive Development (AAID), which prioritizes sustainable and inclusive economic growth through increased domestic resource mobilization.
“As Liberia works to restore public trust and advance toward fiscal independence, the role of the LRA is central,” the Authority stated. “We are working tirelessly to modernize the tax system, improve efficiency, and promote fairness for all taxpayers.”
Looking ahead, the Authority will focus on consolidating digital reforms, strengthening enforcement, and deepening inter-agency collaboration to ensure smoother operations and better performance. With continued public engagement, legislative support, and technological integration, the LRA hopes to not only close revenue gaps but also build a more transparent, accountable, and efficient tax administration system that supports Liberia’s long-term development vision.
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