The study focuses on two specific domestic taxes – income taxes and consumption taxes (goods and services taxes), which have in recent time undergone some specific changes in the Liberia revenue code of the 2000 Act, as amended in the 2011 consolidated Act, and the 2016 economic empowerment tax amendments Act respectively. Hence, it is timely to examine the impact of these recent reforms on the progressivity and redistributive capacities of domestic taxes in the country.
The study intends to widen our understanding of tax and development issues by assessing, for the first time in the context of Liberia, the extent to which the relatively recent income tax policy reforms have impacted the distribution of income (income inequality) and poverty levels in the country. The study will take into account the impact of the new increase in goods and services tax policy tool on household income inequality and poverty levels in the country. It is expected that the outcomes of the current study will help to inform policy makers who are interested in tax equity and redistribution issues with nuanced options to better reform the income and consumption tax financing systems in Liberia.