Evaluating the Liberia Revenue Code: A Strategic Framework for Combating Illicit Financial Flows and the Informal Sector

Abstract

This paper critically examines the Liberia Revenue Code (LRC) for its efficiency in revenue� collection and its capacity to address illicit financial flows (IFFs) and the informal sector. It� explores how weaknesses in policy design, enforcement mechanisms, and institutional� capacity have limited the Code�s effectiveness in reversing revenue losses and expanding the� formal tax base. Drawing on relevant fiscal, legal, and economic literature as well as practical� developments within the Liberian context, the analysis demonstrates that while the LRC� provides a foundational tax framework, it lacks the structural provisions to effectively� combat the twin challenges of IFFs and informality. The proliferation of unregulated financial� activities and informal enterprises continues to erode Liberia�s tax base, undermining efforts� to achieve economic stability, equity, and development. The paper calls for the development� and implementation of a national strategy anchored on empirical research, institutional� strengthening, legal reforms, and digital innovations to ensure greater fiscal sustainability,� improved compliance, and a formalized economic environment conducive to national� development. It argues that without strategic intervention, the fiscal cost of these phenomena� will continue to widen, and the state will remain handicapped in delivering on its� developmental mandate.�