Sierra Leone

Scope of GST

Goods and Services Tax (GST) is imposed by the Goods and Services Act 2009. Unless specifically exempted, GST is charged on:

• taxable supply of goods and services

• taxable imports of goods and services.

A taxable supply is a supply made in Sierra Leone by a taxable person in the course or furtherance of a taxable activity excluding exempt supplies.

Taxable import means an import of goods other than an exempt import.

GST is chargeable when:

• a taxable supply is accounted for and paid by the supplier

• a taxable import is paid by the importer at the time of the import.

GST rates

The GST Act provides the following rates on a taxable supply or import:

• If the supply or import is zero-rated under the first schedule, the rate is 0%.

• In any other case, the rate is 15%.

GST registration

Compulsory registration

A person has to register for GST at the end of the month if:

• the person exceeded the registration threshold in the period of 12 or lesser months ending on that day

• the person exceeded one-third of the registration threshold in the period of four months ending on that day

• there are reasonable grounds to expect that the person will exceed the registration threshold in the 12-month period commencing on the following day.

The registration threshold for GST is a turnover of taxable supplies exceeding SLE350,000 (approximately US$17,140) in any 12-month period.

The following persons are required to register for GST irrespective of whether that person exceeds the threshold or not:

• promoter of public entertainment or a licensee or promoter of a place of public entertainment

• government entity or a local council that makes taxable supplies

Voluntary registration

Group or branch registration

A group of taxable persons can apply to the Commissioner-General for approval to be treated as one taxable person provided each member of the group agrees to be jointly and severally liable for any breach of the GST Act.

A person who conducts a taxable activity through one or more branches may apply for separate registration for each branch provided that each can be separately identified by reason of nature or location or its business activity and each branch maintains a separate accounting system.

Non-residents

A non-resident person who conducts business principally in Sierra Leone and meets the registration threshold is required to register and charge GST. However, if the business of the non-resident person is through a resident agent, the GST will be payable by the resident agent and not the non-resident person.

In the case of telecommunications services, the supply is regarded as to have taken place in Sierra Leone if the supplier is a non-resident and a person physically in Sierra Leone initiates the supply whether or not the supply is initiated on behalf of another person.

The person who initiates a supply of telecommunication services is the person who is identified by the supplier or recipient of the service as being:

• the person who controls the start of supply

• the person who pays or receives payment for the services

• the person who contracts for the supply.

Application for registration

Any person who qualifies for registration shall apply to the Commissioner-General within 30 days of the date on which the person is required to register. The Commissioner-General is required to provide a written notification of registration within 21 days of the date of receipt of the application.

The date of effect of registration is the date on which the person was required to be registered. A GST registration certificate will be issued to the taxable person after registration.

Deregistration

A registered person who does not make taxable supplies for a six-month period and who does not intend to make taxable supplies within a further consecutive 12-month period is required to apply for cancellation within seven days after the end of the six-month period.

Any registered person whose taxable supplies do not exceed the registration threshold in a 12-month period may also apply for cancellation of its registration.

Input GST

Input GST allowed

Input GST expressly denied

Input GST deductions are not allowed on the following:

• acquisition or import not made in course or furtherance of the person’s taxable activity

• acquisition or import or hiring of a motor vehicle or spare parts and repair and maintenance services of the vehicles

• entertainment including food, beverages, recreation or hospitality of any kind, unless the person’s taxable activity involves providing entertainment

• fees or subscription dues of a club, association or society of a sporting, social or recreational nature

• acquisition import or hiring of mobile phone handset or spare parts or repair services unless the person’s taxable activity involves dealing in or hiring out handsets.

Partial exemption

A taxable person who makes both taxable and exempt supplies shall determine the input GST credit for a period as follows:

• if the input GST relates wholly to making taxable supplies, full amount is deductible

• if any input GST relates wholly to making of supplies that are not taxable, no input tax is allowed in respect of those supplies

• if the input GST relates to making taxable and partly to making other supplies, the input tax deduction shall be apportioned based on the percentage that relates to taxable supplies.

Preregistration or post-deregistration GST 

A taxable person may within six months of becoming registered apply to the Commissioner-General to be able to claim input GST on taxable acquisitions or taxable imports made in the three months preceding the date of registration.

In the instance where the registration of a taxable person is cancelled, the person is regarded to have made a taxable supply of goods or services on hand at the time the registration is cancelled but only if the person was allowed an input GST credit in respect of the acquisition or importation of those goods or services.

Output GST

Exempt supplies

Exempt supplies include, but are not limited to:

• agricultural inputs

• supply of water, excluding bottled or other packaged and distilled water

• education services

• medical services and pharmaceuticals

• transportation of persons by bikes, buses and similar vehicles, ferry, train and air excluding internal air travel, boat and hovercraft services

• financial services, i.e. by financial institutions licensed, regulated and supervised under the Bank of Sierra Leone Act 2019 or any other similar enactment.

• crude oil and hydrocarbon products excluding lubricating oils

• goods designed exclusively for use by the disabled

• supply of animals, fish and birds imported for breeding and rearing purposes, seeds and bulb rooting imported for propagation

• plant, equipment, machinery, apparatus and appliances designed for use exclusively in agriculture, veterinary, fishing and horticulture, manufacturing and mining

• supply of rice in its raw state

• supply of land and buildings

• supply of solar and energy saving equipment

• local agricultural produce for manufacturing

• telecommunications services without consideration

• services in the aviation industry within the country

• supply of renewable energy from mini grids-connected solar power

• materials for the conduct of national elections

• arms, ammunition and security equipment imported by the government or by a person authorised by the government

• medals and medallions and other decorations imported by the government for awards.

Zero-rated supplies

Zero-rated supplies include the following:

• export of goods including rutile and its by-products, iron ore, bauxite, gold, diamonds and other minerals

• goods shipped as stores on vessels and aircraft leaving the country.

Advertising prices

International trade

Imports

Goods imported other than exempt goods and services are subject to GST, and the importer of the goods is required to account for the tax.

The importation of taxable services which are not used in making taxable supplies is subject to GST. The receiver of the service must account for GST by means of a reverse-charge mechanism. The reverse charge applies to services that are supplied by a non-resident to a person in Sierra Leone otherwise than through a resident agent.

Exports

Place, time and value of supplies

Place of supply

A supply of goods or services takes place in Sierra Leone if the supplier is a resident.

Should the supplier be a non-resident person and it involves goods, the place of supply is Sierra Leone when the goods are located in Sierra Leone at the time of the supply. For services, the place of supply is Sierra Leone if the services are physically performed in the country by any person who is in Sierra Leone.

Time of supply

The time of supply of goods or services is the earlier of the time when:

• An invoice for the supply is issued by the supplier

• Any of the consideration for the supply is received

• Goods are delivered or made available for collection

• Services are performed

Value of supply

The value of a taxable supply is:

• where the supply is for monetary consideration, the amount of the consideration with the addition of all duties and taxes but excluding GST

• where the supply is not for monetary consideration or is only partly for monetary consideration, the fair market value excluding GST.

GST compliance

Accounting basis and tax period

Returns and payment of GST

GST returns must be submitted monthly and must be filed no later than the last working day of the month immediately following the month to which the return relates. Payments must be made by the due date for filing. A person who fails to pay GST on or before the due date for payment is liable to a penalty equal to one-twelfth of the 364 day treasury bill rate for each month that the payment remains outstanding. 

Pecuniary penalties/interest also apply on (but not limited) to:

• late submission of a return

• non-filing of a GST return

• failure to register

• failure to display a GST certificate

Refunds

Credit is given to offset the following month’s liability. A request for a refund may be made where the excess credit has been outstanding and the person has ceased operation or deregistered.

Despite this, a GST refund or input GST credit shall be utilised to offset current and future GST claims within three years. Any unutilised credit will be written off after the third year.

Objections and appeals

Objections must be lodged with the Commissioner-General within 30 days after notice of the decision has been served on the taxpayer or upon the taxpayer becoming aware of the decision.

A person who is dissatisfied with the decision of the Commissioner-General may lodge an appeal with any court with jurisdiction to hear and determine tax disputes within 60 days after being notified of the decision.

Withholding GST

Applicable only for professional services

Appointment of withholding GST agents

Withholding GST exemption

GST record-keeping

Tax invoices

GST invoices should contain the following:

• customer’s name and Tax Identification Number

• description of goods or services supplied

• date of supply, invoice or payment

• invoice amount (excluding GST), GST amount and GST rate

• total inclusive of the GST.

Every registered GST trader is required to maintain an electronic cash register (ECR) as may be determined by the Commissioner-General for the purpose of recording all transactions. GST booklets for manual invoices are no longer acceptable by the tax authority.

A registered supplier must issue an invoice generated from the ECR whether that customer requests the tax invoice or not.

A person who has not received a GST invoice from a taxable person or GST registered supplier for purchase or supply made, may request a GST invoice as evidence that a taxable supply was received.

Credit notes and debit notes

A credit note is issued to a recipient of a supply where the amount on a tax invoice exceeds the amount that should have been charged, while a debit note is issued to a recipient of a supply where the amount on a tax invoice is less than the amount that should have been charged. Their issuance should be based on the fact that:

• the supply has been cancelled

• the nature of the supply has been fundamentally varied or altered

• the previously agreed consideration for the supply has been altered by agreement with the recipient of the supply, whether due to an offer of a discount or for any other reason

• the goods or services, or part thereof, have been returned to the supplier.

Additional export documentation

Record-keeping

Specific VAT rules

Bad debts

Land and buildings

Leasing

Promotional gifts

Secondhand goods

Transfer of business

Warranty repairs

Other indirect taxes

Import duties

Excise duties