Liberia 2027 Budget: US$1.07 Billion Tax Revenue Projected

• Liberia's proposed 2027 budget is US$1.54 billion, its largest ever, with a major shift towards tax revenue.
• Tax collections are projected to increase by 26.5 percent to US$1.07 billion in 2027, replacing declining mining and one-off revenues.
• The 2026 budget benefited from a one-time US$200 million payment from ArcelorMittal Liberia, which will not recur.
• Mining royalties are expected to drop by US$168.2 million, and petroleum royalties will be almost negligible in 2027.
• Taxes on income and profits, international trade, and domestic goods and services are all projected to see significant increases.

The strategic reorientation of Liberia's 2027 budget towards greater tax reliance marks a pivotal moment for the nation's fiscal policy.

Liberia is poised to implement its largest national budget yet for Fiscal Year 2027, totaling US$1.54 billion, with a significant strategic pivot towards increased tax revenue. This proposed financial framework, recently submitted to the Legislature by President Joseph Nyuma Boakai, outlines a substantial increase in tax collections, projected to reach US$1.07 billion from an estimated US$847.5 million in the current year, marking a 26.5 percent rise.

This shift is necessitated by the anticipated decline in one-off payments and non-tax revenues, particularly from the mining sector. Royalties and rents from mineral mining are expected to decrease sharply from an estimated US$287.6 million in 2026 to US$119.4 million in 2027, representing a US$168.2 million reduction. Similarly, petroleum royalties and rents, which contributed US$23.8 million in 2026 from offshore block signing fees, are forecast to be almost negligible in the upcoming fiscal year. The government also expects a drastic drop in other one-off receipts, from US$228 million in 2026 to just US$40 million in 2027.

The current fiscal year saw Liberia's revenue surpass US$1 billion for the first time, a milestone largely attributed to a one-time US$200 million payment from ArcelorMittal Liberia. This payment was a crucial component of the 2026 budget, which was initially set at US$1.2497 billion and included US$256.2 million classified as contingent revenue, meaning its receipt was uncertain. The ArcelorMittal contribution was specifically identified within this contingent revenue.

The US$200 million payment from ArcelorMittal Liberia was made under the third amendment to its Mineral Development Agreement, which extends the company's concession until 2050. The International Monetary Fund characterized this as a "one-off bonus payment," equivalent to 3.5 percent of Liberia's gross domestic product. By September 13, 2026, revenue collections had reached US$997.43 million, crossing the US$1 billion mark days later; without the ArcelorMittal payment, collections at that point would have been approximately US$797 million. For context, total domestic revenue for the entirety of 2025 stood at US$847.7 million. A US$53 million supplementary budget, primarily funded by delayed World Bank support, further increased the 2026 budget to US$1.3027 billion, with the ministry estimating total resources for 2026 to close at US$1.38 billion.

The proposed US$1.5389 billion budget for 2027 is structured around four main components, with core domestic revenue accounting for the largest share at US$1.35 billion, or 87.8 percent. External resources are projected to contribute US$92 million, contingent revenue US$40 million, and US$55 million will be carried forward from 2026, a significant increase from the US$5 million carried into the current year.

Within this framework, the emphasis shifts dramatically from non-tax sources to a broader tax base. Tax revenue is projected to constitute 69.7 percent of total resources in 2027, up from an estimated 61.4 percent in 2026, while non-tax revenue, including royalties, is expected to fall from 32.2 percent to 18.2 percent. Specific tax categories are targeted for substantial increases: taxes on income and profits are projected to rise by US$95.2 million, taxes on international trade by US$96.9 million, and domestic taxes on goods and services by US$32.3 million. Taxes on income and profits are anticipated to remain the largest single source, contributing US$511.2 million, nearly half of all tax revenue, followed by taxes on international trade at US$419.4 million. Finance Minister Augustine Kpehe Ngafuan acknowledged the US$200 million gap left by the non-recurring mining payment in September, expressing confidence that economic growth would compensate for or exceed this shortfall.

The strategic reorientation of Liberia's 2027 budget towards greater tax reliance marks a pivotal moment for the nation's fiscal policy. This move aims to establish a more sustainable and predictable revenue stream, reducing dependence on volatile one-off payments and fluctuating mining royalties. The government's plan to significantly boost Liberia's tax collection projections underscores a commitment to domestic resource mobilization as the primary engine for funding its ambitious US$1.54 billion budget.

This shift means that the larger tax base is intended to more than compensate for the anticipated Liberia mining revenue decline, fundamentally altering the composition of the country's financial resources. The emphasis on increasing revenues from income, profits, international trade, and domestic goods and services suggests a broad-based approach to taxation. This strategic adjustment is crucial for ensuring the stability and growth of the Liberian National Budget for Fiscal Year 2027, moving away from the reliance on singular, large contributions like the ArcelorMittal Liberia US$200 million payment that characterized the previous fiscal year.

Lawyers and compliance officers advising businesses in Liberia should anticipate increased scrutiny and potential adjustments to tax obligations, particularly concerning income, profits, international trade, and domestic goods and services, as the government shifts its revenue strategy towards greater tax reliance for the 2027 budget. Companies should review their financial forecasts and compliance strategies to prepare for these projected increases.

Source: Original reporting via The Liberian Investigator