Sierra Leone Levies 15% Tax on Big Diamonds

Sierra Leone has imposed a new 15 per cent tax on exports of high-value diamonds.

The West African country, which is attempting to reverse years of economically debilitating mismanagment and corruption after a 1991-2002 civil war, charged as of December 28 an export tax of 15 per cent of the value of stones worth more than $500,000.

"The new tax of 15 per cent is a windfall," said Abdul Ignosse Koroma, deputy minister of mineral resources. "Diamonds exported under the former 6.5 percent (tax) were not in the interest of the country."

Diamonds, many of which are dug in dangerous conditions by amateur miners, are the poor country's main source of foreign currency.

A mining act passed last November raised taxes on diamonds to 6.5 per cent from a previous 5 per cent, and on gold and other precious metals to 5 per cent from 4 per cent.

The former British colony aims to attract investors as it tries to rebuild its economy. As well as diamonds and titanium ore, Sierra Leone has the potential to be a source of gold and iron ore.

Traders said the 15 per cent levy on high-value stones may prove counterproductive.

The most recent official Sierra Leonean export figures valued shipments of diamonds at $36 million in the first six months of 2009, down from around $50 million in the same period of 2008.