By zainab.joaque@awokonewspapersl.com
Freetown, SIERRA LEONE – Sierra Leone’s outdated tax treaties are under scrutiny as policymakers seek to curb revenue losses and reform mining agreements. At the launch of a recent Budget Advocacy Network (BAN) report, finance and tax experts raised alarms about the lack of transparency in these agreements and their impact on domestic revenue.
Moderator Aminata Kelly-Lamin did not mince words, criticizing the secrecy surrounding tax treaties and mining contracts. “Most of these agreements are hidden; you won’t find them online,” she stated. She highlighted that some treaties are so old they date back to “my grandmother’s mother,” making them ineffective in today’s economic climate. Her call for a comprehensive review underscored a growing concern: are these agreements helping or hurting Sierra Leone’s economy?
Abu Bakarr Conteh, Deputy Director of Revenue and Tax at the Ministry of Finance, acknowledged the problem. Sierra Leone currently has double taxation agreements with over six countries, which, while intended to prevent companies from being taxed twice, have inadvertently weakened the nation’s corporate tax base.
“When you enter into these agreements, you may be unknowingly shrinking your corporate tax revenue,” Conteh explained. A major issue is “treaty shopping,” where foreign investors exploit loopholes to minimize taxes. As a result, mining companies and multinational corporations often pay far less than they should, depriving the government of much-needed revenue.
Conteh assured the audience that Sierra Leone is actively working to terminate unproductive agreements and bring tax policies in line with national interests. “We are currently in the process of ending some of these agreements,” he confirmed. However, he cautioned that reforms must be handled carefully to prevent legal challenges and economic disruptions.
Kelly-Lamin also warned against a “race to the bottom” among ECOWAS member states, where countries slash corporate tax rates to attract foreign investors. She urged Sierra Leone to harmonize its tax policies with regional counterparts to avoid excessive losses.
Conteh responded by highlighting ongoing ECOWAS efforts to align energy tariffs and VAT rates, though corporate tax rates remain inconsistent across member states. He stressed that harmonizing Sierra Leone’s tax incentive framework is equally critical. “If we create a balanced investment incentive system, we can prevent unnecessary revenue leakage,” he argued.
A key recommendation from the discussion was to reinstate regular monitoring visits by the Ministry of Finance and the National Revenue Authority (NRA) to companies benefiting from tax exemptions. Conteh also proposed setting annual limits on duty waivers and ensuring that investors granted bilateral agreements cannot simultaneously access other tax breaks under general law.
Kelly-Lamin closed the session with a firm reminder: tax exemptions and incentives must be managed with accountability. “If policies are in place, then the people paid with taxpayers’ money must do their jobs,” she urged.
With Sierra Leone facing persistent fiscal challenges, swift and decisive action on tax reform is crucial. The government’s push to review and terminate outdated tax treaties is a step in the right direction, but real change will depend on whether these policies are enforced effectively. ZIJ/28/3/2025
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