Liberia’s Shift From GST to VAT: Key 2026–2027 Updates

November 20, 2025

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Last December, when announcing the 2025 Budget, the Liberian President Joseph Nyuma Boakai Sr. announced the intention to replace the current GST regime with a new VAT regime in 2026. This announcement followed the VAT White Paper published by the Ministry of Finance (MoF) in early 2024, resulting in the enactment of the VAT Law in April 2024. In the 2026 Budget, published on November 11, 2025, the MoF has focused on the steps required to transition gradually from GST to VAT.

Key VAT and GST Provisions

In the 2026 Budget, the Liberian government, more specifically the MoF, outlined its plan to strengthen its fiscal base by introducing several measures that are fair, practical, and aligned with long-term economic goals. The most important provision regarding the GST is that it will increase from 12% to 13% as part of a gradual shift toward a complete VAT system, which should modernize Liberia’s tax system and improve overall efficiency.

Simultaneously, the government plans to expand taxation of the digital economy to limit revenue losses and curb base erosion, ensuring that cross-border digital transactions and global online platforms contribute their fair share to the country’s tax base.

In addition to MoF adopting the VAT Law and planning the gradual increase of the GST rate, the Liberia Revenue Authority (LRA) held a three-day training program for its senior management to deepen their understanding of the upcoming VAT system. In its media release, the LRA underlined that the VAT system is scheduled to launch on January 1, 2027, and registration will open in July 2026, giving businesses and individuals six months next year to enroll under the new framework.

Conclusion

The Liberian government, together with the Tax Authority, is continuing to make necessary changes and updates to ensure the transition from the current GST to the VAT regime. Considering the inevitable transition to a new indirect tax system, taxable persons should carefully determine how these changes affect their day-to-day business activities and tax obligations.

Source: Draft National Budget FY2026, Liberia Revenue Authority, VATabout

When will Liberia officially switch from GST to VAT?

Liberia plans to launch its VAT system on January 1, 2027. Registration for the new VAT framework will open in July 2026, giving taxpayers six months to register before the system goes live.

What GST change is planned before the VAT system begins?

As part of the gradual transition, the GST rate will increase from 12% to 13%. This step is part of the government’s broader strategy to align the tax system with the upcoming VAT regime.

Why is Liberia moving from GST to VAT?

The government aims to modernize the tax system, strengthen its fiscal base, and improve overall efficiency. The shift to VAT is intended to create a more sustainable and practical revenue framework.

How is Liberia preparing for the VAT implementation?

The Ministry of Finance adopted the VAT Law in April 2024, and the Liberia Revenue Authority has conducted training for senior management to deepen their understanding of the new system ahead of its rollout.

How will digital economy taxation change under the new system?

Liberia plans to expand taxation of digital services to reduce revenue losses and curb base erosion. Cross-border digital transactions and global online platforms will be expected to contribute more to the country’s tax base.

What should businesses do to prepare for the VAT transition?

Businesses should evaluate how the shift from GST to VAT will impact their daily operations and tax obligations. Early preparation will help ensure smooth registration in 2026 and compliance once VAT begins in 2027.

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