Domestic Resource Mobilization & Fiscal Probity: Antidote for Bridging Liberia’s Fiscal Gap in the wake of the Dwindling of Donor Aid to Liberia
DOI:
https://doi.org/10.59261/jedvb.v2i2.106Keywords:
Domestic Resource Mobilization, Tax Administration, Tax-to-GDP ratio, Fiscal Gap, Sustainable DevelopmentAbstract
Liberia has long depended on foreign assistance or aid to complement its domestic resources to deliver on its evolving complex development priorities and needs. The decline in foreign aid poses major challenges which can be surmounted through effective domestic resource mobilization strategy and fiscal probity. This research paper aims to provide antidotes to strengthen Liberia’s ongoing domestic resource mobilization efforts and strategies to adequately bridge its fiscal gap arising from the plummeting of donor aid to Liberia. A mixed method of research designs was adopted for this study. The paper was developed from secondary data extracted from reports and studies on domestic resource mobilization, case studies, and primary data obtained through interviews with tax experts and practitioners from Liberia. The paper found that Tunisia, Seychelles, Morocco, South Africa and Senegal have sustainably mobilized domestic revenues through effective DRM strategies, including tax administration modernization and digitalization, economic diversification, broadening of tax base, transparency and fiscal governance, and effective tax audit programs. Liberia’s potential to accrue more domestic resources lies in exploring its mining sector, biodiversity and ecotourism, agricultural value chains, informal economic sector, tax administration modernization, and specialized tax compliance audit programs. These findings can support Liberia’s ARREST Agenda for Inclusive Development and reduce dependence on foreign aid.
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