-To Boost Domestic Industry
Monrovia: President Joseph Nyuma Boakai has enacted a transformative policy through Executive Order No. 151, fundamentally restructuring Liberia’s rubber export economy by prohibiting the shipment of unprocessed rubber materials. The immediate ban affects all raw rubber products including natural latex, cup lumps, tree lace, bark scrap, and other unprocessed forms classified under HS Code 4001, marking a decisive shift toward mandatory domestic value addition.
Under the new regulations, only processed rubber commodities such as latex concentrate, technically specified rubber (TSR), and ribbed smoked sheets can be exported without restrictions. Exporters seeking exemptions for raw rubber shipments now face a stringent financial framework designed to discourage the practice, including a 4% presumptive tax withheld at the point of domestic purchase based on official pricing from the newly established Liberia National Rubber Pricing Committee. Additional requirements include a substantial $150 per metric ton surcharge—totaling $3,000 for a standard 20-ton container—alongside variable contributions to the Rubber Development Fund Incorporated (RDFI) aimed at sectoral growth.
The compliance mechanism introduces rigorous documentation demands, compelling exporters to obtain tax clearance certificates and submit proof of all tax payments to the Ministry of Agriculture before receiving export authorization through the Export Permit Declaration system. Post-shipment obligations include remitting advance income taxes ranging from 2-4% of declared export values, with severe penalties for non-compliance including $50,000 fines for initial violations and potential revocation of export privileges for repeat offenders.
This policy shift represents a strategic effort to transition Liberia from a raw material exporter to a participant in higher-value rubber manufacturing, addressing longstanding criticisms of economic leakage in the sector. By retaining more processing activities domestically, the government aims to stimulate industrial job creation, increase tax revenues, and reduce vulnerability to global commodity price fluctuations. The move follows similar value-addition strategies implemented by major rubber-producing nations like Indonesia and Thailand, though Liberia faces unique challenges including limited industrial infrastructure and high operational costs that may complicate rapid implementation.
Industry responses have been mixed, with large plantations better positioned to adapt through existing processing facilities, while smallholder farmers express concerns about reduced immediate income from the presumptive tax structure. Economists warn of potential short-term disruptions, including possible cross-border smuggling if regional competitors offer more favorable terms for raw rubber. To mitigate these risks, the government has established a multi-agency oversight team comprising the Ministries of Agriculture, Commerce, and Finance alongside the Liberia Revenue Authority to enforce compliance and develop supporting infrastructure.
