Employers have several tax responsibilities, including the calculation and deduction of Pay-As-You-Earn (PAYE) from employees' salaries and wages each pay period. The deducted taxes must be remitted to the National Revenue Authority (NRA) by the 15th of the following month. Additionally, employers are responsible for submitting an annual reconciliation of PAYE deductions to the NRA.

Pay-As-You-Earn (PAYE)

• Withholding Obligation: Employers must calculate and deduct PAYE (income tax) from employees' salaries and wages each pay period.
• Remittance to the NRA: Taxes deducted must be remitted to the NRA by the 15th of the following month.
• Annual Reconciliation: Employers are responsible for submitting an annual reconciliation of PAYE deductions to the NRA.

Social Security Contributions (NASSIT)

Employers must withhold 5% of an employee's basic salary for NASSIT (National Social Security and Insurance Trust) contributions and contribute an additional 10% as the employer's share. These contributions must be remitted to the NASSIT on a monthly basis.

• Employer and Employee Share: Employers must withhold 5% of an employee's basic salary for NASSIT contributions and contribute an additional 10% as the employer's share.
• Remittance: NASSIT contributions must be remitted to the NASSIT on a monthly basis.

Payroll Tax

Employers are liable for Payroll Tax on the employment of non-Sierra Leonean citizens. The employer bears the responsibility for this tax and cannot pass it on to the employee.

• Non-Citizens: Employers are liable for Payroll Tax on the employment of non-Sierra Leonean citizens.
• Responsibility: The employer bears the responsibility for this tax and cannot pass it on to the employee.

Other Responsibilities

Employers also need to register with the NRA for tax purposes. Accurate records of employee salaries, taxes deducted, and remittances to relevant authorities must be maintained.

• Registration: Employers need to register with the NRA for tax purposes.
• Record Keeping: Accurate records of employee salaries, taxes deducted, and remittances to relevant authorities must be maintained.

In Sierra Leone, the Pay-As-You-Earn (PAYE) system is the income tax system that applies a progressive tax schedule. The amount deducted depends on the employee's taxable income. Tax bands and corresponding rates are periodically updated by the government.

Social Security Contributions (NASSIT)

All employees are required to contribute 5% of their basic salary to the National Social Security and Insurance Trust (NASSIT). This contribution provides social security benefits like retirement pensions and disability coverage.

Other Potential Deductions

Deductions may also be made to comply with court orders, such as for alimony or child support payments. Additionally, employees may choose to have deductions made for additional savings plans, insurance, or other purposes.

In Sierra Leone, most services are subject to the standard Goods and Services Tax (GST) rate of 15%. This includes professional services such as accounting, legal, and consulting, telecommunications services, hospitality and tourism services, transportation services, and construction services.

However, certain services are zero-rated for GST purposes, meaning that GST is charged at 0%, but businesses providing these services can still claim back any input GST they incur. These services include financial services, educational services, and some healthcare services.

There are also a limited number of services that are exempt from GST altogether. Businesses providing these services cannot charge GST, nor can they claim back input GST incurred. Examples of these services include the basic rental of residential property and some public transport services.

Standard-Rated Services

• Professional services (accounting, legal, consulting)
• Telecommunications services
• Hospitality and tourism services
• Transportation services
• Construction services

Zero-Rated Services

• Financial services
• Educational services
• Some healthcare services

Exempt Services

• Basic rental of residential property
• Some public transport services

For the most up-to-date and comprehensive information on GST in Sierra Leone, refer to the National Revenue Authority of Sierra Leone (NRA).

Newly established manufacturing businesses may be eligible for a 3-year income tax holiday. Accelerated depreciation allowances and deductions are available for qualifying capital expenditures. Businesses are also permitted to carry forward losses for up to 5 years to offset against future taxable profits.

General Incentives

• Newly Established Manufacturing Businesses: New manufacturing businesses may be eligible for a 3-year income tax holiday.
• Capital Expenditure Deductions: Accelerated depreciation allowances and deductions are available for qualifying capital expenditures.
• Loss Carry-Forward: Businesses are permitted to carry forward losses for up to 5 years to offset against future taxable profits.

Sector-Specific Incentives

• Agriculture: Income tax exemptions for specified agricultural and livestock activities. Import duty exemptions on agricultural equipment and machinery.
• Tourism: Tax concessions for hotel construction and rehabilitation. Duty-free importation for specific tourism sector goods.
• Energy: Import duty exemptions and other tax concessions may be available for investments in renewable energy and energy infrastructure.

Special Economic Zones (SEZs)

Businesses operating within designated SEZs may benefit from additional incentives including income tax holidays, duty-free imports, and other concessions.

Other Potential Incentives

• Export Promotion: Tax deductions for expenses related to export promotion activities.
• Research & Development: Tax deductions for R&D expenses.
• Training: Tax deductions for employee training costs.