Tax laws Sierra Leone
Sierra Leone's taxation system encompasses various taxes, including income tax, value-added tax (VAT), and other duties, administered by the National Revenue Authority (NRA) under the Ministry of Finance.
1. Income Tax:
Individual Income Tax:
- Taxation applies to business income, employment income (including benefits), rental income, pensions, investment income, capital gains, and other specified incomes.
- Income tax returns must be filed within 120 days after the end of the accounting period, typically by April 30.
Corporate Income Tax:
- Resident and non-resident companies are taxed at a rate of 30% on taxable income. citeturn0search1
Capital Gains Tax:
- Amendments in the Finance Act 2020 introduced provisions requiring withholding and payment of capital gains tax on the disposal of chargeable assets, with specific obligations for both residents and non-residents.
2. Value-Added Tax (VAT):
Standard Rate:
- VAT is levied at a standard rate of 15% on most goods and services supplied in Sierra Leone. citeturn0search7
Registration and Compliance:
- Businesses providing taxable goods or services are required to register for VAT and comply with reporting obligations. Non-compliance can result in penalties.
3. Withholding Tax:
- Recent Changes:
- The Finance Act 2024 increased the withholding tax rate from 10% to 15% on dividends, management and professional fees, and lottery winnings.
4. Other Taxes and Duties:
Minimum Alternate Tax:
- The Finance Act 2024 reduced the minimum alternate tax on turnover from 3% to 2%.
Education and Health Levies:
- An additional 1% education levy, alongside a 0.5% national health insurance levy, applies to contractors, resulting in withholding tax rates of 6.5% for resident contractors and 11.5% for non-resident contractors.
5. Tax Incentives and Exemptions:
- Tax and Duty Exemption Act, 2023:
- This Act provides for exemptions and deviations from standard taxes, duties, fees, or charges under specified conditions.
6. Administration and Compliance:
National Revenue Authority (NRA):
- The NRA is responsible for tax administration, including collection, enforcement, and taxpayer education.
Ministry of Finance:
- The Ministry oversees economic policies, public financial management, and provides guidance on financial matters.
For comprehensive and current information, consulting the NRA or a tax professional is advisable.
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