Tar and DutY ExemPttons Act 2023

ACT Supplement to the Sierua Leone Gazette Vol. CLXII4, No. 40 dated 22nd June, 2023 TAX AND DUTY E)(EMPTION AC-t,2023 ARRANGEMENT OF SECTIONS Sections. PARI I.PRELIMINARY PROVISIONS l. Commencemenl L Interpretation.

PART TI - GENERAL PROVISIONS

PART I]I. PRTVILED6E INSTITUTIONSAND PERSONS E)(EMPTED

The Presideut. Cabinet Ministers, Chief Justice and Judges of the Superior Courts of judicatwe. Members of Parliamenl inciuding the Speaker and Deputy Speaker of Parliament Diplornats Diplomatic Missions. Religious Organisations. Donor and Charity Or-eanisations. Retrniug DipiomaS and Returning Sierra I-eoneanswithin Government Employment" ll. 12"

PARI' IV -INTERNA f ioN/,I, TECHNICAL COOPERATION, TECHNICAL ASSIS'IANCE A].i D DE,VELOPMENIT PARTNER PROJECTS

Tar and DutY ExemPttons Act 2023 n No.25 PAKTV-MINISTRIES DEPARNVENTS AND AGENCIES

PARTVI.STATESECURTTYANDoTI{ERSPECIALGoVERNMENT TRANSACTIONS

Transactions for Security Gotids and Personnel'n. Medals, Medallions, andother decorations for National Awards

PARTVII-PRTVATE INVESTMENT DGMPTIONS n. Sector specific tax incentives for strategic investmenl PARSVItr-USERCHARGES, FEESAND TRANSITONALI.-EVIES

V4. TransnationalLevies- . PARTX-OTHERSPECIALPRMLEGES

X. ExecutiveAPProval. PAKT X .MSCELTANEOUS PROVISIONS

9. Clearance on Permit.

Y. Offences and Penalties.

SrcNeo this 2nd day af MaY, 2023 No.25 2423 Sierra Leone Thx and Duty ExemPtions Act, 2023 Being anActto provide forthe regulation and administration of tax and duff exemptions and toprovide for other related matters tl ENecrsp by the President and Members of Parliament in this present Assembly of Parliament DR. ruLruS MAADA BIO. President. Short titlc. Date of commencement- @ Tiu and DutY F.xenPttons Act 2023 2 No.25 PART I.PRELIMINARY PROVISIONS ccnmenc€tn€'E 1' Unless otherwise provided this Act shall be deemed to have come into operarion onthe lst day ofApril2023 tnterpretation. 2. In this Act rmless the context otherwise requires- "diplomat" means any pers{)n or individual appointed by a natiorral govemruent or an intergovernmental organizatiorr, Juch as the Economic Community of Wist African States, United Nations' European Union for the purpose of carrying out diplomatic activities in Sierra Leone, which the Ministry of Foreigrr Affairs and International Cooperation attests "n;o>i"g pffomatic Immunities and Privileges under tfr" Vi"rinu ionventions on Diplomatic Relations and on Consular Relations or other similar treaties and agreements, or under principles of recognized law; "diplomatic mission" means a group of people from another State and includes embassies andconsulates or of an intergovemmental organization represenfing and safeguarding the political, economic' and social interests of such State or organization through the conduct of official engagements and negotiations; "charitable organisation" means a philanthropist' or not-for-profit organisation whose overall purposes are charitable in nature and carrf ingnon-commercial activities directed to only provide public benefits' an identifiable group in need and not to the selfinterests of speci{ic individuais; "clearance on permit" means the approval g{rted by the ministry responsible for finance to allow an irnporter of it"*i specified in this Act to collect the good, b"fot* the start of the Customs clearance procedures; No. 25 Tizx and Duty Ltemptions Act 2423 J "Commissioner General" means the person appointed under Section I 9 of tbe l{ational Revenue Act 2022 (ActNo.2l of2022). "concessional facility" means a loan, or any developmer)t support operation provided on concessional terms to Sierra Leone, under the direction and/or participation of the Ministry resporrsible for l'rnance; "customs duties" means import tariffs generally collectable on imported goods by the National Revenue Authority based on the application of an appropriate rate on the Cost, Insurarrce and Freight (ClF) value of the goods; "development partners" include European Union, Intemational Monetary Fund, Vvbrld Bank, orher bilateral parmers or institulions, clther multilateral rnstitutions, and aid co-ordinating groups; "development partner project" means a programme or project supported directly or indirectly by ir development partner, public intemational cr regional organization through loans, grants and direct aid for the purposes of a technical cooperation programme or project; "dornestic taxes" means direct and indirect taxes collected on income generated and on goods and services consumed within the geographical confines of Sierra Leone, which income tax, corporation tax, domestic GST, withholdingtax on interest, dividend, and domestic excise- "donation or grant" means any transfer of gift made in cash, goods or services between another counfry and Sierra L,eone, an organiration in another country and Siena Leone. 4 No. 25 Tbx and Duty Etemptionr Act 2023 or an organization in anotber country and an organization in Sierra Leone, for whichno repayment is required; exemption means a deviation over a tax perio<l from a tax, duty, iely, fee or charge provided for under a general tax law. and for which the taxpayer has a redr,rced or lesser tax liability than ire would have had without such deviation from a tax generai law. "fce, levy or charge" includes rates of any kind or any moneys charged or lcvied oD persons, goods, services pursuant to any enactnent; "general lax law" means a law in force of fiscal impost of Sierra Leone, which forms the primarl' basis for applying such fiscal impost in the country; "harrnonised Commodity f)escription and Coding System" mearrs the nomenclature comprisilg the headings, sub- headings and their related numerical codes, the section, chapter and sub- heading notes and the general rules for the interprelation of the Harmonised System contained in the text af the International Convention or the Harrnonised Commodity Description and Coding System approved by the Custorns Co-operation Corrncil on l4th June, 1983 and the relevant Scherlules attached to it; identifiable group" includes a cnmmunity, a religious body, a health facility, a training centrc, an educational institution, a registered association or a relevant government entity; "import" means to bring or cause goods to be brought into the country; No. 25 Tax and Duty Exemptiora Act 2023 5 "import taxes" include excise duty, import GS! ECOWAS Levy, African Union Levy and other charges collectible on imported or exported goods; "intemational organizntion" meAns a regional or an intergovemmental organization in which Sierra Lrone has a membership and participates pursuant to any treaty, bilateral or multilateral agreements or under the authority of the Constitution of Sierra L,eone, l99l or an), Act of Parliament or any other legal instruments authorizing or giving an approval for such participation; "International technical cooperation,, means an engagement of a foreign government with Sierra l,eone in an economic cooperation for the transfer of sector specific skills, technical knowhow and technolory required for accelerating the pace of economic and social development of the country; "investnent" means the direct invesnnent of foreign or domestic capital into a business enterprise in Sierra lrone; "investor" means any natural person or legal enlity, including companies, business associations" partnerships, sole proprietorships and other organisations constituteC or otherwise duly organised under the laws of Siena Leone to op€rate a business enterprise; "incentives" in relationto investmen! means the legal fscal provisions specifically designed to encourage investment and includes the confennent of any advantage in respect of particular invesfinents; "levy" includes any specified fiscal impositionpayable pursuant to an enactment; 6 No. 25 Tax and Duty Exemptions Act 2023 "manufaclure"means to make, produce or cause to be made or produced, goods; "Minister" means th6 Minister responsible for furance and Ministiy shall be construed accordingly; "persot'ts with disobilily" means an individual rvith a physical, mental, or sensory impairment, including a visual, hearing, or speech firnctional disability which gives rise to physical, cultural or social barriers that substantially limits one or more of the major life activities of that individual; "port, user, servicetbes or charyes" are fees or charges paid at the port by users ofthe Port; "privileged persons" mearrs the President, diplottuts, diplomatic rnissions, persons with di$ability, or any other person or entit-v recognised under this Act; "religious organisation" means organization which is recognised as having a sole purpose lbr advancin-s religion in a manner not considered for profitmakrng but engaging in activities to pr:rpo5efully advance religious beliefs and interests "securill, service" means a service connected with national security as the National Securiry Council ma.1'determine; "Ministry, Depanment or Agency" means a Sierra l,eone State entity and includes a central g,overnment, local government authority. a state enterprise or public corporation; "vehicle" rreans a convcyance for the transpr:rl by Iand ofgoods <lr persons. No. 25 Tax and Dury Eremptions Act 7023 7 3. (l) ThisAct shall - (a) apply to all categories of exemptions; and &) be read together with any other enactments relating to the imposition ofta:<atioq levies, fees and charges and other related public financial management matters. @ Where there is a conflict or inconsistency between this Act and any other enacfinent related to tax and duty exemptions, thisAct shallprevail. (3) Where there is a fiscal stability clause in an agreement ratified by Parliament beforc the commencement of this Act, it shall be recognised as an approved fiscal stability clause under this Act to tle extent that it protects a right holder of the agreement from- (a) the imposition of new discriminatory taxes or Govemment charges that does not exist at the date the agreement is ratified; (b) the a-iteration ofan existingtar or Government charge in the agreemen! in a discrirninatory mSruler; or (c) the alteration which materially affects dre tax anci other similar payment obligations ofthe right holder of the agreement to the Government (4) For the purpcse ofsubsection (3) an approved fiscal stability clause shall be a clause in an invesfment agreement sigrred with the Government of Sicrra Leone that shall wanant the fiscal regime in the agreement to colltinue to apply or remain unaltered to the detriment of the inr.esting party" Application. Tax and DutY ExemPtions Act 2023 8 No.25 Prohibition of excmptions PART II -GENERAL PROVISIONS 4. (l) A contract awarded after the commencement of this Act shalt noi contain any provision relating to the grant of exemption unless it complies with the provisions of this Act (2) A law or contragt that fails to comply with subsection (l) shall have no effect and shall be unenforceable under the laws of SierraLeone Rcsponsibility5.(1)AMinistry,DepartmentorAgencyshallnotfacilitate of lv0As. a draft lawor enter into a contract that contains an exemption with a privatepersonorcontractorunlessthatexemptionislawfully$anted Pursuant to this Act' (2) A Ministy, Deparftrent orAgency shall not facilitate any Draft 'law or enter into an agreement with a private person or conmctortograntanexemptionexceptwiththeauthorisationofthe . Minister (3) A Ministry' Department or Agency that wishes to facilitatetr,"p*'ug"ofalaworenterintoacontractcontainingan exemptionshallsubmitarequestfortheexemptiontotheMinister. (4) Where the Minister receives the request for exemption referred to unaer subsection (3) he shall prepare a cabinet paper containingallthenecessaryinformationrelatingtotheexemption and shall iubmit the cabinet paper to cabinet for its consideration and aPProval- Responsibility 6. (1) The Minister shall be respomible for the following of the Minister' @) negotiating all exemptions on behalf of the State; (b) submitting any negotiated exemption to No. 25 Tax and Duty Exenptiot s Act 2023 9 Cabinet for approval and Parliament for ratification pursuarrt to section ll0 ofthe Constitution of Sierra l,eone I 99 I before the exemptiontakes effect (c) seeking executive approval for an exemption during emergencies A) After receipt of a request for an exemption Aom a Government Ministry, Departrnent orAgency, the Minister shall vet the request and ensure that the exemption is consistent with the economic management priorities and general poliry ofthe Goverrunent on exemptions before submitting the request to Cabinet for approval or Parliament for ratification . (3) The Minister shall use an exemption as a development and economic managernenttool and shall advise Cabinet accordingly. (4) The Minister shall monitor the use of an exemption and ensure that Ministries, Departrnents and Agencies and other relevant stakeholders are informed on an1, policy, Law or requirement established to effectively administer exemptions and ensure their compliance. (a) a detailed assessment of the value of the anticipated exemptions assumed in the contract; O) the list of items and taxes to which.the exemptiPns are aPPlicable; (c) a limit on the total value ofthe exemPtions to be granted under that contract; and 7. (1) Where an exemption is contained in any draft l31y s1 ApProval and draft contract placed before Calinet for approval and Parliamen lo. modification ratification the draft law or draft contract shall be accompanied dtr e*emptioo the following information - requ€st" l0 No.25 Tax and DutY ExemPtiow Act 2423 The (d) the implications of the exemption on develoPment outcom€s' Q) A draft law ordraft contractthatcontains anexemption shallonlybeconsideredbyCabinetorParliamentifsubsection(1)of Section (3) and subsection(l) of Section (4) have been complied with. (3) An exemption negotiated by the Minister and placed before cabinet for approval and Parliament for ratification may be variedbyCabinetorParliamentanrjtheMinistershallnotifythe party concerned about the variation' PART M-PRTVILEGED INSTITUTIONSAND PERSONS DGMP"I-ED 8. (l) All goods imported or procured for the personal use of the Presiden! including vice President of Sie.rra Leone, shall be exempt from customs duties, taxes, fees and charges including port charges. (2). An exemption for the President under any law shall be deemed forthe personal use ofthe President' (3) For the purposes of the administration of exemptions' an exemption request frorn the offrce of the President for which the purposeisnotforthepersonaluseofthePresidentshallnotbe treated as a request for the personal use ofthe President' (4) A person shall not make a request for exemption for the President which is not for the irersi-rrtal nse of the President Presideut. No.25 Tax and Duty Exemptions Act 2023 U (, A person who contravenes subsection (4) commits an offence and is liable, on conviction, to a fine of not less than One Hundred Thousand New Leones and not more than Five Hundred Thousand New Leones or to a term of imprisonment of not less thart six months and not more than five years or to both the fine and imprisonment 9. (U A Cabinet Minister, the Chief Justice and Judges of Cabrnct the superior courts of judicaore shall be granted exempted from H[ftJ"*t* customs duties and import taxes on the importation cf one vehicle ff"oil*T;t provided that- Courts of judiceture. (a) the vehicle has an engine capacity ofup to 5.7litres 1b) the vehicle is imported solely for the personal use of the intended beneficiary and not imported for resale or disposal to another person ; and (c) the title of the vehicle is not tansferred to any other persr)n. @ A reque,st for exemption under subsection (l) shall be made by a Cabinet Minister, the Chief Justice and any Judge of the superior courts ofjudicatura onc€ every five (5) yeam. l0 0) A Member of Parliament, including the Speaker &rd Members of Deputy Speaker of Parliament shall be eligible to import a20-fr. irXllj|:l;lh" container ofpersonal household items and one vehicle free ofcustom Speakcr and duties and inrport taxes, provided that nl?tJ; "Parliament. l2 No. 25 Tax and Duty Exemptions Act 2023 Diplornats Diplomatic Missions. (a) the vehicle has an cngl're capacity ofup to 5.7lites (b) the vehicle is imported solely for the personal use ofthe Mernber of Parliament, the Speaker and Deputy Speaker and not imporred for resale or disposal to any other person; and {O the titie of the vehicle is not transferred to any othcr person. A) A request for exemption under subsection (ti shall be urade by a Member ofParliament once during each. rycle of Pariiament ll. (l) Goods and r.ehicles imported by or for the offrcial use of diplornatic rnissions shall be exempted from payrnent of custtrms duties and other import taxes on the following conditions - (a) an exemption to a diplomat and diplomatic missions shall be on a reciprocal basis; and (b) goods and vehicles irnported by or for the oficial use of diplomatic missions shall tre exernpted tom the paynent of customs duties and other import taxes. @ Exemptions of custom duties and other imports taxes on household goods and other personal effects ofdiplomats based in Sierra Leone shall be permittcd for- (a) heads of diplomatic missions and their immediate fumil ies accompanying thern; and No.25 Tat atd Duty Exe mptions Act 2023 13 (b) officers of diplomatic missions, including consular officers who are eligibie and considered in the diplomatic list and their dependent families; (3) {ny exemption of customs duties and other import ganted under this section shall be in accordance with the following- (a) the irnported goods should be in reasonable quantities and not imported in quantities deemed forresale; (b) a staff of an international organisation, a foreign embassy, a development partner agency, a diplomatic mission or a consulare, shall impo( their household or personal effects within the first six months on the fnst arrival in Sierra lrone; (c) customs duty exemptions shall not be made to citizens of Sierra Leone, including dual nationals, or permanent residents, and those appointed as honorary consuls; (d) goods and articles exempt from import duty which are intended for officia! purposes and consumptL'n by the diplomatic nrissions, consular posts, third country institutions, shall not be sold, lenq pledged- leased or assigned without noti$ing the Ministry .; t4 No. 25 Tax and Duty Exemptions Act 2023 (e) authorities shall have the right to inspect personal baggage ofadiplomatic manber in his presence or his authorized representative if there are serious grounds or reasons to presume that it containsi goods or articles not imported for the official use of the mission; ii" goods or articles not impoded for the personal use ofthe diplomatic member or members of his dePendent familY forming part of his household; iii not imported or exported goods prohibited or controlled by law t$ A diplomat or diplomatic mission shall- (a) submit import requirements ofthe mission to the Minisfr-v every six monlhs; &) apply for an exemption based c,n the import requirements submitted under paragraph (a); (5) A diplomat shall not be exempted from paying tne (a) indirect taxes of any kind tliat are nomrally incorporated as part of the price of goods and services; tbllowing No. 25 Tax and Duty E-temptions Act 2023 l5 (b) dues and taxes on transactions with private income having a source in Sierra [rone; (c) dues and taxes ontransactions, includingthe use of private movable and immovable property situated in Sierra lcone; (d) fees and payments for specified services rendered utilities, motorways, tansportation and related matters; and (e) other dues, fees and taxes specified to be paid mderArticle 34 ofthe Menna Convention on Diplomatic Relations, 196 I (5) For the purposes of thisAct, the minister responsible for Foreigrr Affairs and International Cooperation shall annually submit to the Minister, a list of all diplomats and diplomatic missions that qualifu for exemption. (O For the avoidance of doubt, exemption under this section shall not apply to persons contracting with a diplomatic institution or head of mission. (a) altars, altar bread altar or communion wine, communion wafers, decorations exclusively for churches, mosques and other recognized 12. (l) Religious organisations for the sole purpose of [?HlH,,"rr. advancing religion shall be exempted from the payment of import duties and import-related taxes on the following rvorship related imports- No.25 Ta and Duty ExemPtions Act 2A2316 religious facilities, fonts, lecterns, pulpits, ptate, clerical or clergy vestments, bells, religious rosaries, statuary objects, ; (b) musical irstrutnents, including pews, pianoes, organs, ke1'boards, drums, guilars, and public address systems subject to suc'h conditions as the Commissioner General may impose; (c) limited computers, photocopiers, printers subject to such quantity as the Minister may impose; (d) limited number of cars, vans and pickups specitlcaliy acquired for use on the condition that the religious entity is also engaged in charitabie work subject to the quanity imposed bY the Minister; and (e) other religious requisites notably used exclusively' for Public worshiP as recommended by the Ministerresponsible for Religious Affairs and approved by the Minister. @ For the purposes of paragraph (d)subsection ( 1), cars, vans pickups imported for religious purposes shall attract the applicable rates on goods and sen,ices tax and other consumption taies. No. 25 Tax and Duty ExemPtiow Act 2023 t7 13. (t) Subject to sub-section (2) imports of a charitabt" Hfitr,*o institution a philantbropist or any other non profit organisation organisations' including a donation from a donation paroner for the purposes of carrying charitable work in education , health , social services and WAISAN s shall be imporred Aee from importdutyand importt xes @ An application for exemption uldsl this section shall be processed by the entity concemed after satisfying the following conditions - (zil the application for exemption letter shall be signed by the oflicial head ofthe beneficiary entitl'. supported by a recommendation from the relevant sector minister and approved by the Minister; G) a charitable organisation shall not be engaged in any commercial activity connected to the imPorted items; (d) the naa{e ofthe imports, especially the qpe, voluure and. quantity of imports shall be in accoidance with and be proportional to the actual needs oftheir permitted activities; (b) an application for exemption shall spell out in detail the specific items and the quantity of each item expected in the donation or procured as charitable items; Tax and DutY ExemPtions Act 2023 t8 No. 25 (e) allowableexemptionitems,excludingvehicles shall only be lirnited to recognisable food ircms, materials and equipment for health education and WATSAN puq)oses' except in ,ileclared cases of natural disasters and epidemics, u;here such list allowable items can be exPanded subject to the recommendation of the sector minister and approval of the Minister; (0 the importorproceeds fromwhichthe import was procured should be received as donation or gift by the charitable organizalion; G) imported items shall be registered in the name of&e charitable organizationand if donate4 be supported by a verifiable letter from the donor confirming the donation; (h) goods imported for charitable use shall be distributed fiee of financial cost from the affected people and with no evidence of discrimination because of belief, race or gender, in their distribution and where it is proven that charitable goods are distributed with some financial cost, the beneficiary organisation wili facp the fult penalty of the applicable law; (r) imported goods shall be accompanied by a distribution list of ttre names and addresses No" 25 Tar and Duty Exemptions Act 2023 19 of the affected people or beneficiary organisations, which shall be certified by the concerned comPetent Government authorities not belorv the rank of Deputy Secretary; 0) the applicant shall be registered as a charitable organization u{th the National Revenue Authority and fully compliant with othel tax obligations, such as PAYE and withholding tax payments and a valid tax clearance certificate shall sarisfy the registration requtement with the NRA; and 0O charitable organizations shall remain compliant in submitting in advance to the Ministry of Finance, a half-yearly import requirement of its charitable work and failtue to cornply with this requirement will result to a revoking of the privilege. (3) A charitable irstitution shall importat 5% import dury and the applicable rates for Goods and Services Tax and other consumption taxes for ihe purpr:ses of their charitable work subject to the following conditions- (a) very lrmited number of cars, vans and :J"T:1,5i:l:*'*o** for use urv on n No.25 Tax and Duty F-xemptions Act 2023 Rcurming Diplomats and Rctuming Sierra Lconeans within Government Employment. O) not more than two (2) goods carrying vehicles, such as vans and one (l) passenger carrying vehicle in every five years, unless there is a demonstrated need depending on the size, activities and operational needs of the organisations and the circumstance of each institution shall be assessed on its own merits and as recommended by the Ministry of Planning and Economic Development and approved by the Minister; (c) no used vehicle, unless, in rare cases, it is directly donated to the organistion rvhich shall demonstrate strongneed for itand shall be not more than 5 years old from the date of its first registration; and (d) imported and locally purchased official vehicles shall be used for a minimum period offour years, before permission for disposal and replacement exemption on another vehicle, is granted, unless otherwise new projects are being creatcd to warrant addition of vehicle fleet for an NGO's operations. 14. 0) A returning Sierra lronean diplomat and a person with full employnent within Govemment shall be eligible to import personal household items and one vehicle fr* ho* customs duties and import taxes provided the beneficiary- No.25 Tizx and Duty Exemptions Act 2023 2t (a) is above eighteen (I8)years old and carry a citizenship of Sierra Leone at the time of impotingthe personal and household iterns; (b) has informed and. obtained acknowledgement in writing from the ministry responsible for Foreign Affairs and International Cooperation or employing entity about his/her intention to return and reside perrnanently in Sierra Leone; (c) within the last twelve (12) months prior to returning to Sierra Leone is an employee of an intemational or regional organization in which Sierra Leone participates pursuant to Iaw (not applicable to a returning Sierra Leonean full employment with central Government); (d) has resided abroad fbr a continuous period of at least five (5) years immediately prior to his return to Sierra ["eone; (e) acquired the vehicle abroad as rhe registered owner at least six (6) montk priort9 returning permanently to Sierra Leone; (0 requires the vehicle forhis personal use and for resale or disposal to any other person; Tax and Dut.v ExemPtions Act 2023 a) No.25 Technical Cooperation projects. G) imports the vehicle into Sierra Leone not later than six (6) months after obtaining the acknowledgement referred to in paragraph (a); (h) shall not seli or trinsfer the vehicle within two (2) Years of its imPortation PART IV. INTERNATIONAL TECHMCAL COOPERAflON' TECHNICAL ASSISTANCE AND DEVELOPMET{T PARTNER PROJEC"TS 15. (1) An import by a development partner ' a public intemational or regional organisation may be g?nted an exemption in accordance with the agreement goveraingtheparticular prografiune or project for the purposes of a technical cooperation programme or project (2) An exemption referred to in subsection (1) shall take no effect, unless laid as a legislative instn.rment before Cabinet and Parliament for approval in accordaace with Section I l0 of the Constitution of Siena l*one, I 991' (3) For the purposes of Section 3a(l) of the Public F-inancial Management Act 2016, the exemption referred to in subsection (l) shall be assessed, quaotified, and expressly reported aSpartoft}reinstrumentlaidbeforeCabinetandParliamentfor approval and shall form an annex or schedule to an agreement siped bythe Government for carrying such a programme orproject No.25 Tax and Duty &emptiotts Act 2023 77 (4) For the avoidance of doubt, foreip experts working on technical cooperation programme or projects may be granted exemption on income related to the delivery of such technical cooperation progralnme or project in the country. (5) Notwithstanding any provision of this Act, the lr{inister shall explore the possibility of negotiating an exemption free agreement for an international technical cooperation or donor project, unless otherwise there is a stong necd for such an exemption to be granted as part of government counterpart funding. 16. (l) Subjecttosubsection(2)animportofapmgrarnmeor Programmes a projeo fulty funded by a grant may be granted an exemption required #rSHt" in the agreement governing the programme or project grants' (2) Where a progranrme or a project fully funded by a grant is to be provided with an exemption, the Minister shall, in accordance with Section I l0 of the Constitution of Sierra [,eone, i 991, la1, a legislative instrumsrt before Cabinet and Parliament for approval, the exemption referred to in subsection (l ) before it takes effect (3) For the avoidance oi doubt, and subject to any applicable agreement on voidance of double taxation , a private ctrntractor or an employee of a private con0Sctor who executes a contact shall be subject to applicable domestic taxes. (a) No exemption shall be allowed on any import of a progranirne or a project referred to ut subsection ( I ), unless imported under the name of the progmmme or project' and where Ote programme 24 No.25 fta and Duty Exemptions Act 2423 Concessional facility projects. or project is implemented whollyor in part by agoveilment Ministry, Department orAgency" the customs clearance shall be canied by or under the authority ofthe Sierra lrone National Shipping Cornpany I.imited 17. (l) Subjectto subsection(2) an import for aproject firnded by a concessional facility may be granted an exemption from the payment of a negotiated concessional facility agreement. A) Where a project funded by a concessional facility is to be provided with an exemption, the Minister shall secure the approval of Cabinet and Parliament for the exemption referred to in subsection (l) before ittakes effect in accordance with Section I l0 of the Constitution of Sierra lrone, 199 I . (3) No waiver of dornestic taxes shall be granted on a concessional facility projecq unless ifthe waiver shall be required as a one of the primary conditions of the facility and negotiated as par of Government counterpart funding. (4) For the avoidance of doubt, and subject to any appticable agreement on the avoidance of double taxation a private contractor or an employee of a private contractor tbat executes a contracl under a project funded by a concessional facility shall be subject to the payments of ail applicable taxes. No. 25 Taxarul Duty Fxemptioru Act 2023 ,( PART V. h{L\ISTRIES DEI'ARTI\{ENTS AND AGENCIES 18. (l) Subjecttosubsection(4)anewcontractenteredinto Provision for by a Mu:istry. Department or Agency with a private supplier o, ff.D#"r.a cGntractor tbr the suppll, ol'goods , services or projects to the contract Ministr-y, Department or Agency shall be inclusive of the basic cost of the Contract ;rnd all applicable tax paments due to *"he contract (2) A p,-ivate supplier or contractor who executes the supply of goo<is. services or pmjects for a Ministy, Depanment or ,4.gcncy shall not be relieved of his tax obligations in respect ofthe execution of any supply of goods, services, or projects under a contract. (3) Where a person in a Minisrry, Deparfrnent orAgency sigrrr a contract with a private supplier or mntractor relieving him fiom any tax obligation under the contract both commit an offence and liable on ctrnviction to the following - (a) for the person in the Ministry, Deparfinent or Agency, to a fine of not less than NLe250,000 and not more than NLe500,000 or to a term of imprisonment of not less than two years or to both the fine and imprisonment; and O) for the private supplier or contractor to a fine of not less than NL,e 500,000 and not more than NLe1,000,000 or to a term of inprisonment of not less than two.and-half years or to bottr the fure and imprisonment. Tax and DutY Exct rPtions Act 2A23 x No.25 Transactions for SecuritY Goods and Personnel. (4) A Ministry, Department or Agency shall be liable to pay through budgetary provisions imprt duty, Goods and Services Tax (GST) and other taxes, levies and chalges on their imports and contracts that are subject to these payments' PAKTVI-STATE SECURITY AND OTIILR SPECI,AL GOVERNMENT TRAI'ISAC:TIONS 19. (l) An exemption of customs duty and irnport taxes including polt charges shall be granted on the procurement ofgoods' services or projects of the foliowing security items or personncl- (a) anns, ammunition, specialized security vchicles, public order and communication equipment imported by the Govemment or by a private person contrac"ted or authorized by Govemment to do such for and on its behalf; (b) procured personal effects, excluding vehicles ofa securitypersonnel retuming fi'om peacekeeping operations abroad. Q\ For the purpose of this Act, the price of a contract arvarded by a Minislry, f)eparunent nr Agcncy for the procurernenl ofsecurity goods or services shall consist ofonly the trasic cost of the contmct which shall be the prevailing market rate exclusive of any applicable tax payments due on the conmct' (3) Any contract for the procurement of security goods, services or projects shall be subject to the provisions ofthis Act. No. 25 Tax and Duty Exemptions Act 2023 21. An exemption from customs duties, import taxes and port :.l"#te cfiarges shall be granted on any election related materials imported Materials. by or for the Govemment for the conduct of elections by the National Electoral Commission. PART VII- PRTVATE INVESTME}.IT EXEMPTIONS n 20. An exemption from customs duties, import taxes and port Y"dutt, charges shall be granted on medals, medallions and other decoration. XiufJif" imported directly by or for the Government for awards by the President ff*ii:fff, and National Security Institutions. Awards' 22. (l) \Mrere an investor in a specific sector, indusny or investment programme applies for a tax concession to the minister of the specific sector, industry or investnent program , after receipt of the tax concession application the Minister of the specific sector, industry or investmenf progralnme shall make a recommendation to the Minister to grant the concession afrer receiving approval from Cabinetor Parliament @ Where the tax concession referred to in subsection (l) is on customs duties and importtaxes, the list of the items to which the concession applies and the exact concessional rate for each item shali be expressly provided in a legislative instrument made under this Act. (3) Where there is a desire for Government to take up carried interest in any business or investment programme t}at accesses tax concessions, the Minister shall constitute a team to negotiate a reciprocal equi{ in the invesunent for the tax concession granted under subsection (l)" Sector specific tax inccntives for strategic investment. No" 25 Tax and Duty Exemqtiow Act 2A23 x (4) Where the Governinent wishes to relinquish an equity stake it has in an investment with a private investor by virtue of a tax concession grante4 the investor shall have an unreserved right to buy back the equity stake at the prevailing nrarket price' (, For the purposes of this section, the minister responsible for trade, industrialisation and invesfinent shall- (a) in consultation with other relevant Government Ministries, Deparunents, and Agencies, determine the priority investrnent areas and required investment level for Cabinet approval; (b) within ttrirty days after the approval refered to in paragraph (a), Publish- (i) inthe Cazette; (ii.) in a newspaper of national circulation; (iil) on its and other relevant websites, (O A private investor who seeks tax concessions under this Act shall make an application to the relevant sector Minister. A A relevant sector minister shall, in consultation with the relevant Ministries, Departments orAgencies, determine whether Tax ard Duty ExenPtions Act 2A23 DNo.25 an investrnent for application with tax concession falls witbin the priority areas and investruent level specified under paragraph (a) of subsection (5), and shall convey the request of the investor to the Minister. (8) The Minister shall, on receipt of the application specified under subsection (6)- (a) enter negotiations with the investor ; O) assess thrcugh the negotiations: 1i.) detailed cost of the investnenq (ii.) eract scope and details of the tax concessions requested and to be granted; and (iii.) whether Government can take an appropriate equffy in the investnent for the negotiated tax concessions. (9) Subject to section (6), the Minister shall, on concluding the negotiarion retened to in paragraph (a) ofsubsection (8), noti& his colleague lr{ir:iser in the relevant supervisory Minisnry about the negotiated tax concessions. 30 No.25 Tax and Duty ExemPtions Act 2023 Servicc or user charges and f€es. Transnational Levies. Persons with disabilit5' PART VItr. USER CHARGES, FEES AND TRANSITONAL I.,EVIES 23. (l) No exemption from a service, user charge or fee charged by government or government conffictsd service provider for the provision ofa service shall be granted to a person who uses the service unless provided fo1 under this Act. (2) Notwithstanding any law , a person who uses a service for which a service, user charge or fee is chargeable shall be subject to the payment and any associated service, user charge or fee. 24. No person shall be exempted from paying any intemational regional or community levy', such as the African Union Levy or the Economic Community ofWestA&ican States Levy, imposed by reason to finance the operations and programmes of any international, regional or community organisation, unless an exemption is sanctioned by the relevant organisation. PART D( - OTT{ER SPECIAL PRIVILEGES 25. (l) Any item, material, article, equipment and motor vehicle modified or designed for the exclusive use of persons with disability, imported by instiartions or organisations involved in the caring, support and rehabilitation of persons with disability, recommended by the Minister responsible for Social welfare and approved by the Minister shall be exempted from the pa)T nent of import duty, Goods and Services Tax, demurrage charges, port charges and any other levy or charge imposed on irnports' No. 25 Tax and Duty ExemPtions Act 2023 31 (2) Any donation, bequest, subsidy, or financial assistance made to a Govemment Ministry Department or Agency or other organization involved in the caring, support, and rehabilitation of persons with disability shall be exempted fiom import duties and taxes. (3) b-or the purpose of computing tarable income of a registeled taxpayer in Sierra Leone, a donation. bequest, subsidy, or financial assjsrance referred to in subsection (2) shall be allowed as a deduction fiom the gross income for persons or organizations that made the donation, bequest, subsidy, or fnancial assistance' (4) Subsection (3) shall not apply to persons in default of their tax obligations with the National Revenue Authority before the donation, bequest, subsidy, or financiat assistance referred to under subsection ( 2) was rnade. 26. (l) Iniport and procurement of goods and equipment wil<llife recommended by the responsible Minister and approved by the conservation Minister shall be exempted frotn custotns duties, taxes, fees and port charges and any other levy or charge imposed for the purposes of protecting, safiguarding, and upkeeping a wildlife conservation zone, such as the Tacuguma Chimpanzee Sanctuary (2) A donation, bequesg subsidy, or financial assistance made lbr the purposes of protecting, safeguarding and upkeeping a rvildlife conservation zone shall be exempted from import duties and tilxes. (3) For tlir: purpose of computing taxable income of a registerrrd ta\payer in Sierra Leone, a donation, bequest, subsidy, or JZ No.25 Tax and Duty Exemptiow Act 2A23 Governmenl printing malerials equipment. Executive Approval. Disembarking Passcnger. financial assistance referred to under subsection (2) shall be allorved as a deduction from the gross income for persons or organiztions that made the donation, bequest, subsidy, or financial assistance. 27. The importation of equipment and materials used exclusively by Government Printing Department or any entity contracted by the Govemment with the Ministry's concurrence. fbr the printing of Sierra Leone's passport, national identification ca.rds, business incorporation and registration cedificate, vehicle licence other official documents on behalf of the Government shall attract zero percent import duty rate. 28. Where a cabinet approval required under this Act cannot be readily obtained during an emergency that arises an Executive approval may satisfy the requirentent for such Cabinet approval. PART X -MISCELT.ANEOLTS PROVISIONS 29. Subject to the appiicable customs law, a disembarking passenger or a similar travelcr with any accompanied personal baggage shall be allowed an exemption on the following- (a) not more than 200 sticlcs ofcigalenes or 2509 of other tobacco product; O) not more than two (2) litres ofwine, spirituous liquors ofany kind or beer; (c) nct more than a quarter (0.25) litre of eau de toilette (frangrance water) and 50g of perfume; No" 25 Tax and Duty Exemptions Aet 2023 -1J (d) not more than a suitcase of pemonal effects; (e) other personal effects not exceeding five hundred United States Dollars (US$500) in aggregate terms. 30. (i) Where a holder of an exemption transfers ownership Transfer of right of an item exempted under this Act to a person not entitled to ownership of the exemprion under this Acq the tansferee of ttre exempted it"r, ;Xtfro,j.lt:? shail pay to the National Revenue Authority an exemption granted ui on taxes drre and payment on the item at the time ofthe nrnsfer. exemption. (2) For the purpose of'subsection (l), a holder of an exemptirln who disposes or tansfers an ownership right of an item exempted under this Act held hy him, shall be obliged to provide the Minisuy and National Revenue Authority with full details of the disposal or impenriing change of ownership of the exemption. (3) Subsection (l) shall not apply if the transfer of an exenlpt item ulder this Act- (a) takes place between persons holding an exemption underthisAcl except for hansfers relating to categories under Section I l, for which subsection (l) shall apply; antl O) is a donation to a Ministry, Departrnent or Agency. 3I. (l) The Minister may levoke an exemption on the Revocation grounds of committing an offence stipulated under section 29 !l.ilrr,* O Where an exemption is revoked under subsection (l) a notice shall be served to the grantee of the exemption and the individrral, enterprise or institution so served shall be liable to refund, with interest, fines, and charges applicable by law the full amount of the exemption already utilised under this Act to the National Revenue Authority, or the item shall be seized and auctioned. 34 No. 25 T'ax and Duty Exemptions Act 2023 Clearance ort Permit. (3) For the purpose of this section, a grantee of an exemption shall make and sign a declaration recognizing the iegal obligation to fully comply with this r\ct and to refirnd. with interest, fines and charges or seizure and auction associated with an exempt item under this Act in the event of a violation of conditions for the grant of the exemptions. 32. (l) Subject to the applicable (:ustoms procedure a clearance permit shall be allowed for perishable goods, medicines and vaccines, weapons and ammunitions and other sensitive exempt items under this Act. (2) A reqrrest for clearance on permit referred to under subsection (l) shall be made directly to the lr{inistry after initiating an exemption request under this Act. (3) The request for clearance on permit shall include copies of all documents submitted as part of the request for waiver of customs duty and tax. (4) The normal ciearance fbrmalities, including processillg the exemption request through the clearance system operated by tbe National RevenueAuthority to perfecting documentation, shall apply to clearance on permit proc€ss. 8) Any requests referred to under subsection (l) shall be directed through the supervisory ministry which shall recommend the request to the Minister for approval. (3) Upon receipt ofthe request electronically a supervisory ministry shall review and assess whether an application frrr customs clearance ofan excmption satislles all applicable requirements before recommendation to the Minister for approval. Procedures 33. (l) A request for cu-stoms processing an exempted item i?1.:::1':" under this Act shall be lodged online through completing the clearaflce oI ," "-.*p,i", exemption declaratiOn form in the customs Clearance system operated itenr. by the National Revenue Authority. No. 25 Tax and Duty ExemPtiow Act 2023 35 (4) The Commissioner General strall electronically process the release of consignment on the approval by the Minister of an application for customs clearance of an exemption, (, A completion of the release processing notification shail be transmitted by the National RevenueAuthority to an applicant of the request referred to under subsection ( I ) or his customs clearing agent. 34. (1) A person commits an offence if he- (a) grants or causes to grant an exemption in an enactment or a contract entered with an investor, a private person or contactor in conkavention with this AcU O) provides false information to influence a decision on the grant or administration of an exemption; (c) fails to report knowledge or information in respect of an exemption-related fraud committed by a person against the State to the appropriate authority or law enforcement authority; (d) connives in commiuing any of the offences referred to in paragraph (a) and (b); (e) fails to comply with a provision ofthisAcl (2) A person rvho contravenes subsection (1) is liable to a fine of one hundred thousand Leones and on conviction, to a fine ofnot less tlran two hundred and fiffry thousand Leones and not more than five hundredttrousand kones orto atenn of imprisonmeilt , for not less than six months and not more than five years or to both the fine and imPrisonment Offences and Penalties. % No.25 Tu and DutY ExemPtions Act 2023 (3) A person who fails to comply with an exemption provision providJ for in this Act commits an offence an4 is liable to afineoftwohundredandfiftythousandLeonesandonconviction, to a fine ofnot less than five hundred thousand Leones and not more than one hundred million Leones or to a term of imprisonment fornotlessfhansixmonthsandnotrnorethanfiveyearsortoboth ' the fine and Prison term. (4) A person commits an offence and is liable to a fine of trro hundred andfifty thousand New Leones and on conviction to a fine of one-and-halftimes the tax amount accruing from the grant of autilisedorutilisingexemption,ortoatermofimprisonmentfornot less than six years or to both the fine and prison term if he' (a) knowingly makes or signs a false documentation, false return, or false record ofentry in administrationof an exemption; (b) fails to use an exempt item under thisAct for the intended Purpose; consequential 35. 0) The Finance Act 2006 is amended in section 3 hy Amendments. deleting the amount of NLe1,000,000 and insertingNk 5000 New Leone in is Place' Q) The Person With Disabiliry Act 2011 is amended by repealing,e"tio,,s33and34bythesubstitutionofthosesections with section 25 ofthis Acl (3) The Finance A ct202l is amended by repealing section 48 and replacing it with section 27 of this Act' (4) A provision in any legislation other than the- (a) Goods and ServicesThxAct2009' Tax and Dtity ExemPtions Act 2023 vNo.25 O) CustornsAct20ll, and (c) Section 49 ofthe FinanceAct 2013, providing for a grant of an exemption is hereby repealed. (5) Notwithstanding subsection (4 ) (a) an exemption related law passed before this Act and not inconsistent with this Act shall have the sarne effect of this Act and shall continue in force unless rePealed; Oi regulations , orders and rules relating to the administration ofexemptions in force before the commencement of this Act and not Ltconsistent with this Act shall continue to appiy 36.TheMinistermay,bystatrrtoryinstrumentmakeregulationsRegulations. to give effect to this Act 38 No.25 Tax and Duty Exemptions Act 2A23 Passed in Parliament this 24th day of April, in the year of our Lord tu,o thousand and twenty three. ' PARAN UMAR TARAWALLY Clerk of Parliament. Tms Pnn"rro IlexessloN has been carefully compared by me with the Bill which has passed Parliament and found by me to be a true and correct printed copy ofthe said Bill. PARAN UMAR TARAWALLY, Clerk of Parliament. Pnn$ro eNo Pt Br-Isrc'o sy rHE GovprNuE$ PnrNrNG Dreent*anm, SrerRA I-EoNE. Gtznro No.40 or 22uo Jwt, 2023. I