Overview of the Finance Act 2024
Includes updates to Stamp Duties, Customs Tariffs, Excise Rates, new timber royalties, income tax amendments and more
The Finance Act 2024 makes various amendments and provisions related to taxes, customs, excise duties, income tax, goods and services tax, and other financial regulations for the year 2024. Below is a summary of the key sections and amendments included in the act:
1. Stamp Duty Act (Cap 274)
Amendment: The Stamp Duty Act has been amended to revise the rates of stamp duty fees for conveyances and other assignments of property. The new rates are set at 1% of the consideration for properties and 0.2% for financial instruments.
2. Customs Tariff Act (1978)
Amendment: The customs tariff for certain goods, such as cement, rice, iron rods, and cooking gas, has been revised. The new rates are set at 20% for cement, with varying rates for rice depending on the year, and 10% for iron rods.
3. Excise Act (1982)
Amendment: The excise rates for alcoholic beverages such as beer, wine, and other forms of alcohol have been updated. The rates are categorized based on alcoholic content and whether the product is locally produced or imported.
4. Forestry Tax Act (1988)
Amendment: A new section on timber royalties has been introduced. Exporters of timber and timber products are required to pay royalties to the National Revenue Authority based on the market value of the timber.
5. Income Tax Act (2000)
Amendments:
Digital Services Tax: A new provision requires that digital services provided by both resident and non-resident companies in Sierra Leone are subject to income tax.
Minimum Alternate Tax: A minimum alternate tax is imposed on companies reporting losses, set at 2% of the company's turnover.
Withholding Tax Rates: The rates of tax to be withheld from various payments, such as dividends, interests, rents, and royalties, have been revised.
6. Goods and Services Tax Act (2009)
Amendment: The registration threshold for the Goods and Services Tax has been increased from Le100,000,000 to Le500,000. Banks and financial institutions are also required to provide periodic access to taxpayers' banking information.
7. Finance Act (2011, 2016, 2019, 2021, 2023)
Amendments:
Finance Act 2011: Fines for shipping agents who contravene the law have been updated.
Finance Act 2016: New levies are imposed on contracts related to the supply of goods, services, and works in support of the Free Health Care Programme and the Education Sector.
Finance Act 2019: Exporters are required to repatriate a minimum of 30% of their export proceeds to Sierra Leone within 45 days of export.
Finance Act 2021: Provisions regarding the repatriation of export proceeds have been clarified and penalties for non-compliance have been established.
Finance Act 2023: Regulatory fees on cellular services have been imposed on telecommunication operators.
8. Extractive Industries Revenue Act (2018)
Amendment: New definitions and penalties related to royalty returns have been introduced. The royalty rates for minerals, including precious stones and metals, have been revised. Exporters are required to repatriate export proceeds through the commercial banking system.
9. Tax and Duty Exemptions Act (2023)
Amendment: New provisions allow for duty-free importation of machinery and equipment for the manufacturing of biodegradable plastic bag alternatives for a period of five years.
10. General Provisions
Demurrage Free Days: Importers and exporters are granted a fixed number of demurrage-free days after which charges will apply.
Fees, Rates, and Charges: Various fees and charges related to government services, including those related to the Petroleum Regulatory Agency, land registry, and intellectual property, have been updated.
Conclusion
The Finance Act, 2024, introduces a comprehensive set of financial regulations and amendments aimed at updating and streamlining the tax and revenue collection system in Sierra Leone. These changes are designed to enhance compliance, increase government revenue, and support various national programs such as healthcare and education.
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