NRA’s contribution to Sierra Leone’s development
We are, as a nation, in a post war reconstruction period. We have got the institutional reforms in place, but these institutional reforms should be made to work and I think they have been working. The IMC, NaCSA, PPRC, ACC et al post war institutions are today having the greatest political support and this is good. The National Revenue Authority was created by an Act of Parliament 2002, ‘as a central body for the assessment and collection of national revenue, to provide for the administration and enforcement of specified laws, to make consequential amendments to certain laws relating to revenue …’ (Photo: Haja Kallah Kamara, ACG NRA)
As a matter of fact, the NRA was created to ‘formulate and implement plans for developing and maintaining effective, fair and efficient revenue collection system….’ among other functions, as prescribed in section 12 of the NRA Act, 2002. But to what extent has this particular function been achieved over the years? Let us start with the revenue collection effort aspect.
Prior to the creation of the National Revenue Authority, there were two major entities collecting revenues for government. They were the Customs and Excise Department and the Income Tax Department. But as a way of harmonizing the tax generating system, the government brought these departments under one body and then came the National Revenue Authority, through an Act of Parliament.
And since it was created, the National Revenue Authority has continued to generate revenue on behalf of the central government. In 2003, when the agency was established, there was an annual target of 267,961 billion Leones to be generated by the agency and it collected 314,896 billion Leones for the government, meaning it exceeded its annual target. In 2009, there was a target of 668,343 billion Leones and the agency went far beyond target and generated over 700 billion Leones, taking into account the economic meltdown that the world went through. And as of June this year, the sum of Le 402,145 billion has been collected by the agency. So in terms of its function of revenue collection, there has been an encouraging improvement.
Revenue collection is not the only function of the NRA! Ensuring a tax friendly environment, facilitating trade and in also helping to minimize if not stop smuggling are key to the NRA mandate. The aspect of trade facilitation, been one of the key functions of the Customs and Excise Department under the National Revenue Authority has continued to gain momentum. With support from Sierra Leone’s donor partners, especially the Department for International Development (DFID) there has been the establishment of border posts in areas like Koindu, along the Sierra Leone-Guinea border and in Jendema along the Sierra Leone-Liberia border.
The NRA has ensured also a fair tax system by bringing together seven taxes that used to exist under one umbrella, known as the Goods and Services Tax. The GST has now replaced seven inefficient and out-dated taxes in Sierra Leone. They included Import Sales Tax, Domestic Sales Tax, Entertainment Tax, Restaurant and Food Tax, Messages Tax, Hotel Accommodation Tax and Professional Services Tax. Largely, this has helped in simplifying and streamlining the present system of indirect taxation. There is soon, also going to be the introduction of the Domestic Tax Department. This is not a new tax, rather just an administrative change from within the NRA. This will see the bringing together of the Income Tax Department and the Goods and Services Tax Department, under one umbrella. This will help in ensure a tax friendly environment for the business community. This system is also expected to reduce the time that a taxpayer spends in dealing with the NRA.
There has been another major milestone in the development of the National Revenue Authority since its creation in 2002. And this has to do with the introduction of the Automated System for Customs Data (ASYCUDA) .This is an electronic system of dealing with Customs processes and procedures. This system is in operation in several countries, both developed and developing ones. Sierra Leone has only joined the list of countries with ASYCUDA in recent times, following the determination and commitment of the NRA’s Management.
This system was developed by the United Nations Conference for Trade and Development which covers most foreign trade procedures. It takes into account international best practices and handles accounting, transit and suspense regimes. It handles also manifest and customs declarations. The United Nations Conference for Trade and Development took advantage of advances in computer technology to develop this customs software. ASYCUDA ensures fast clearance of goods, and at the same time accounting for revenue collected and compilation of trade statistics. It creates room for an open and transparent operation within a country’s Customs Department.
Notwithstanding these development, the NRA is bound to succeed when it is supported by all and sundry and it is with this that I suggest we, as a nation, continue to support the NRA. There are several ways of supporting the NRA… by exposing smugglers, by paying our taxes, by complying with the laws on taxation among others. By so doing, then we are sure of attaining more.
In a way, the revenue collected by the NRA, it should be noted has been used for national development like payment of teachers, nurses, ensuring proper infrastructural development among others. The NRA will continue to formulate and implement plans for developing and maintaining an effective, fair and efficient revenue collection system, it will continue to institute measures aimed at counteracting fraud and other forms of fiscal evasion. But! These are all achievable when Sierra Leoneans support the NRA.
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