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Strengthening our tax obligations

Strengthening our tax obligations

Attentively, I listened to the President, delivering his speech, during the State Opening of Parliament, last Friday. At some point, I attempted to drive to Parliament Building so as to be a witness to that great ceremony but I could not, due to a number of reasons-ranging from security to traffic congestion. So there I was, listening to the speech, through radio broadcast. I was particularly waiting to know what the President was going to say about our economy as a nation. (Photo: Pa John Baimba Sesay)

From a realistic perspective, Sierra Leone has continued to make progress in the area of economic recovery, taking into account the very fact that locally generated revenue has increased in recent years when compared to what it used to be years back. Sierra Leone’s development efforts should be seen as something collective. And today, this is what we are actually seeing. The comments of the President regarding development within the NRA have gone a long way in telling the nation how important the Authority is, to national development. He was very pleased with the fact that the NRA has not only improved on its revenue performance, but that the modernization plan is working with the introduction of ASYCUDA and even GST.

The NRA is a post war institution and was established with the aim of ensuring things move the way they should .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 …’ Specifically, 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.

Prior to the creation of the National Revenue Authority, there used to be two major entities collecting revenues for government; the Customs and Excise Department and the Income Tax Department. But as a way of harmonizing and broadening the tax generating system, the government brought these departments under one body and then came the National Revenue Authority, through an Act of Parliament.

Practically, since it was created, the National Revenue Authority has continued to generate revenue on behalf of the central government. Doing some comparative analyses in terms of revenue generation between 2002 when the agency was established and 2010, it is a fact, that there has been an improvement in the revenue collection effort by the Authority.  In 2003, 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. This trend has continued to occur.

Delivering his statement during the State Opening of Parliament last Friday, President Koroma spoke on a range of national issues, all having to do with the successes his government has made since 2007. He spoke on what he has done to improve the nation’s educational sector, his effort in improving on agriculture, health, national security and infrastructural development among others. But of specific interest to me was the President’s statement on the country’s economy. We cannot deny that national development should always go along with the needed revenue. The government may have all its development plans, all its initiatives but if the resources are not there, it will be difficult to accomplish. This, the President is aware of. And so he has always give attention to those institutions that should ensure the revenue is available.

In paragraph 49 of the speech, Mr President called the attention of Mr Speaker and informed the House, that ‘in relation to the economy, our aim was to simultaneously maintain macro-economic stability, increase revenues, improve international confidence in the management of the economy, promote investment and re-align government expenditure in favour of infrastructural development. In paragraph 50, he went on to state, that ‘we have been largely successful in achieving our aim.  In spite of the global economic downturn, our economy grew at double the average growth rate for Africa as a whole. IMF and our own figures indicate a rebound of economic activities and further growth this year…’ Indeed, now look at 2009, with a target     of Le 668,343 billion, the NRA collected Le 700,328 billion and this was not withstanding the global meltdown we had.

The President furthered, that Sierra Leone is increasing revenues by broadening the tax base through the introduction of the Goods and Sales Tax, and tackling tax evasion and avoidance through the introduction of the Automated System of Custom Data (ASYCUDA), and tax payer identification numbers. In the first half of 2010, GST collections amounted to Le98.5 billion, far in excess of the amount collected for the whole of 2009 from the previous seven taxes replaced by the GST. Our reforms in the tax collection system have enabled the Government to increase Sierra Leone’s revenue collection effort to 11.7% of GDP in 2009 and it is expected to reach 13% this year.…’ The introduction of ASYCUDA is, in itself a success for the NRA and the government. Today, there is a fast way of clearing goods from the quay. Besides, through ASYCUDA, there will be an improvement in the revenues to be collected by Customs and Excise Department.

The President’s position on the NRA means a lot for us as a nation. It shows the President is appreciating the efforts of NRA workers. It shows, there is, and will ever remain the political support that the NRA needs. It means also that the NRA will continue to improve on its revenue collection efforts and that we should expect more growth in our GDP. There was an annual target of 888.960 billion Leones for this year, to be collected by the National Revenue Authority. But because of the continuous success of the Authority in its revenue collection function; this target has been shifted to 930 billion Leones.

There has been an increase in domestically funded capital spending from Le42.5 billion in 2007 to Le206.8 billion in 2010 as at the end of September, according to the President and that Government’s contribution to road projects increased from Le16 billion in 2007 to over Le80 billion in 2010.But as he rightly stated, ‘…sustaining this process requires vigorous mobilization of resources by all of us. We must pay our taxes; we must mobilize our expertise, strengthen our patriotism and reinforce our obligations to this country. Indeed, as a nation, what we should ensure is for our development to ‘rest on our own shoulders; our progress must be powered by our own contributions; we must not deviate from the priorities we have set…’

Again, with plans to get the Domestic Tax Department by next year, there is certainly going to be an improvement in the performance of the NRA. The introduction of the DTD, will definitely lead to Revenue Enhancement & Efficiency in Delivery of Taxpayer Services. With these and many more, need I say the President was right in his report to the nation on NRA? Catch you next time. Pa Baimba is the name.

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