Lessons from Reformers: Sierra Leone Publishes Corporate Tax Incentives

This case study is part of OGP’s Domestic Resource Mobilization and Economic Recovery in Africa. Read the full paper and other Lessons from Reformers case studies here.

Domestic Resource Mobilization and Economic Recovery in Africa Explore eight ways open government reform can help African countries recover from the immediate crisis and restore their progress towards achieving the Sustainable Development GoalsOGP countries are experimenting with open government innovations to accelerate progress on the Sustainable Development Goals, particularly SDG 16+ which includes peaceful, just and inclusive societies....

For nearly a decade, revenue losses due to tax breaks in Sierra Leone have garnered international and domestic criticism. According to a widely cited 2014 study, the country lost US$240 million a year from tax incentives to corporations, primarily benefiting a handful of mining companies. The same year, the National Revenue Authority in Sierra Leone reported that over US$1 billion was lost in concessions to countries operating in Sierra Leone during the previous two-year period. The government could have used that lost revenue to invest in essential public services like healthcare and educationAccountability within the public education system is key to improving outcomes and attainment, and accountability is nearly impossible without transparent policies and opportunities for participation ....

Sierra Leone began to use its OGP action plans to attempt to address these losses through greater transparency and public accountability. In 2014, the country made a commitment to implement the Extractive Industry Revenue Bill, which would require the government to publish its tax expenditures, including all tax exemptions, the beneficiaries of those exemptions, and the amount of revenue lost. The Ministry of Finance failed to table the bill but did successfully incorporate some elements of the proposed law in other pieces of legislation. However, this other legislation did not address tax concessions, the crux of the Extractive Industry Revenue Bill.

Still, Sierra Leone remains committed to tackling tax transparency through OGP. In 2019, Sierra Leone committed to publishing all taxPlacing transparency, accountability, and participation at the center of tax policy can ensure that burdens are distributed equitably across society. Technical specifications: Commitments related to c... incentives on a government website as well as in the annual budget every six months. While the commitmentOGP commitments are promises for reform co-created by governments and civil society and submitted as part of an action plan. Commitments typically include a description of the problem, concrete action... is still in progress, preliminary analysis by the Independent Reporting Mechanism suggests that, if fully implemented, the commitment could increase transparencyAccording to OGP’s Articles of Governance, transparency occurs when “government-held information (including on activities and decisions) is open, comprehensive, timely, freely available to the pub... More in the tax system and help reduce corruption arising from opaque exemptions.