The Government of Sierra Leone has presented a projected NLe23.5 billion (23.3% of GDP) 2024 Budget to Parliament with a projected deficit of NLe8.6 billion excluding grants and NLe2.7 billion including grants.
The deficit will be financed mainly by borrowing from the domestic banking system which is projected at NLe3.5 billion and NLe277.6 million from the Non-bank sector according to the minister.
The government over the weekend presented the Finance Bill 2024 before parliament, proposing several new taxes and fiscal adjustments aimed at enhancing revenue mobilization and promoting economic growth.
The Bill, presented by Minister of Finance, Sheku Fantamadi Bangura, includes key provisions aimed at bolstering revenue mobilisation and fostering fiscal sustainability. One of the key proposals within the Finance Act, 2024 is the amendment to the Customs Tariff Act, introducing a new 5% import duty tax on imported rice, slated to come into effect on January 1, 2024, and subsequently increasing to 10% from January 2025.
Among the crucial provisions outlined in the Finance Bill 2024 is the reduction of the Minimum Alternate Tax (MAT) rate from 3% to 2%, accompanied by adjustments to its applicability. Additionally, the bill introduces an income tax derived from digital products and services provided by global giants such as Google, Meta, and Amazon, targeting consumers in Sierra Leone.
The Finance Bill also addresses Withholding Tax rates, with adjustments made to Dividends, Management and professional Fees, Rent, and Lottery Winnings, all set at a standardized rate of 15%. Furthermore, a 1% Education Levy has been introduced to support educational initiatives.
In a bid to streamline fiscal policies, the government has harmonized Excise Duty rates for both domestic and import sectors. Notably, Excise Duty has been introduced on petroleum and plastic products.
Several other provisions are included in the Finance Bill 2024, such as the introduction of a 5% Excise Duty on gambling, betting, and lottery activities. Stamp Duty undergoes adjustments with multiple rates applicable to property and other transactions.
The Goods and Services Tax registration threshold has been raised from SLE 100,000 to SLE 500,000, aiming to provide relief to smaller businesses. Moreover, the Finance Bill 2024 reintroduces GST exemption for plant and machinery in the agriculture, manufacturing, mining, and petroleum sectors.
In a strategic move to boost the manufacturing sector, the bill introduces Duty exemptions for plant and machinery related to specific manufacturing elements. Demurrage days have also been adjusted, shifting from weekdays to official working days.
The Finance Bill 2024 reflects the government’s commitment to fostering economic growth, encouraging investment, and ensuring financial stability through a well-structured fiscal policy. The proposed amendments are poised to have a substantial impact on revenue generation and the overall economic landscape of Sierra Leone. The bill is now under parliamentary scrutiny, with stakeholders eagerly awaiting its outcomes.
