NRA, beyond expectations
Much has happened within the National Revenue Authority (NRA) in terms of revenue collection and its Modernization Project. From the revenue front, year in, year out, hundreds of billions have been collected by the agency for central government. And in recent years, revenue performance has been impressive. Very impressive! Since it was created in 2002, there have been positive strides, undertaken by Board, Management and staff of the revenue collection agency to meet the financial needs of the country.
I have kept following recent media reports on the NRA, with regards the agency’s revenue collection effort for 2010. All I could say is, it is good reading those reports and it shows, the NRA is being appreciated by all stakeholders, especially by the media, a sector in society that is very crucial to the socio-economic growth of a country.
Some have looked at the NRA from the point of view of what the Acting Commissioner-General has done and measures she, together with Board, Management and staff were able to put together that enabled them to do what they did in 2010. In particular, The Satellite, of January 13th, referred to the Acting Commissioner-General as ‘’an over-achiever’’. GREAT AND ENCOURAGING NEWS for the NRA Generally, it is true that there was success in the NBRA because all stakeholders, the media inclusive supported them.
2010 success story
There were a lot of successes made by the NRA in 2010. From revenue collection to the modernization of its operational department like Customs, GST and Income Tax to streamlining its processes and procedures; there was also the introduction of the GST, ASYCUDA. But I am attempting to focus my attention to the aspect of revenue collection for the year 2010, look at how it all went the factors responsible and then, the institution’s pending effort to meet more challenges this year and subsequent years. I have always referred to the NRA Act 2002 when looking at what the institution is doing and what the Act says, in terms of the revenues being collected. Specifically Section 27 of the NRA Act instructs the agency to place all revenues into the consolidated revenue fund at the central bank.
In 2010, and as is always the case, a target was set by government that was to be met by the NRA. That target was exceeded, but there is one peculiar thing about this performance since this is not the first time that the NRA has exceeded revenue target; for last year alone, the target was revised three times. First, it was set at Le 786.8 billion by government and was later moved to Le864.3 billion in March 2010.And perhaps due to the hard work of NRA workers and the determination o f the Board and Management, it was again moved to Le889.0 billion and in September 2010 during the International Monetary Fund mission in Sierra Leone, it was moved to Le 930.5 billion. Withstanding the challenges the institution had last year, like getting public acceptance when GST was brought, and even with the trend at the international level, it still went beyond expectation.
Beyond expectation in the sense, out of a target of 930 billion, it collected 954,028 billion and there is the likelihood, these figures will increase since the Bank of Sierra Leone together with the Accountant-General’s office is reconciling the figures. The amount collected represents over 2.5% the revised annual target of Le 930.49 billion. The total revenue collected represents about 13.2% of the annual Gross Domestic Product. Goods and Services Tax department alone collected a total of Le254.9 billion, Customs and Excise collected Le318.0 billion, the Non Tax Revenue Department collected Le80.2 billion and the Income Tax Department was able to collect Le301.1 billion.
In fact for the NRA, the increase in target for three times was seen as a challenge for not only the operational departments which include Customs, GST, Income Tax and Non Tax, but also for Board, Management and staff. More efforts were then put in place to see how such target could be reached and even exceeded.
But there must have been factors that necessitated the impressive performance by the NRA. From a practical standpoint, I need not overemphasise the support that the institution got from its valued taxpayers. This is because even though at some point premises of defaulters were closed, as prescribed by law, some honest taxpayers were always ready to meet their tax obligation. To those honest and willing taxpayers, I hold the view that the NRA is appreciative of their support and willingness to always comply.
Also the dedicated workforce in the NRA should be commended. Their valuable contribution to national development is one that could not be written off from our history books so easily. Even during challenging periods, NRA workers are always ready to give their time. This, coupled with the support of the Board and Management, led to such an impressive performance. Also, the NRA did what it did in 2010 in terms of revenue collection because, the institution has continued to ensuring robust measures in its revenue collection effort like enforcing penalties and intensifying public education on the need for taxpayers to meet their tax obligations. Enforcement and compliance played a crucial role.
As I said earlier, there are those taxpayers who are always willing to meet their core responsibilities, others don’t and for the latter, the enforcement aspect was used; premises of defaulters were closed, among other measures. On the enforcement front, the law allows the NRA to close down premises of defaulters, take legal action, prevent a tax defaulter from traveling and asking for a third party payment. And when some of these measures were utilized, we saw what happened-impressive revenue performance.
Use of revenue
But what is been done with the revenues collected by the NRA? This is one of several questions people have been asking since the creation of the agency in 2002. Well, in a simple and straight forward answer, the taxes we pay are the monies government would normally use to pay teachers, nurses, Doctors, for the rehabilitation of our schools, provision of basic services et el service delivery. When, for instance, government wants to construct roads, if 40% monetary support comes from the donor community, government would be expected to provide the remaining 60%, and this, directly comes from the taxes collected by the NRA.
Now, we have seen in the last three years, efforts by government to provide us with electricity, good roads and free health care in the country. There was no magic performed by government to get these things up and running. It took the NRA and other MDAs more effort to get the revenue for government. So if you have been asking how the tax you pay is being utilized, then look at the development in the roads, see what is happening in the hospitals or even ask yourself when last you put on your generator at home.
Now, there is a domestic revenue projection of 1.16 trillion for 2011 as given by the Minister of Finance during the budget speech 2010. This is a major challenge but one that is not beyond the reach of the NRA. The NRA will always do its best to collect the needed revenue for government and this shall be will done by enforcing penalties on tax defaulters and also by sensitizing the public, especially our valued taxpayers on the need to support the NRA. The NRA has redesigned its Modernisation Plan and is now looking at how to rollout the ASYCUDA in Lungi.
The creation of the Domestic Tax Department is also another measure which will help integrate different tax bodies including the Income Tax, GST, Non Tax and Excise. This will encourage specialization; and significantly increase revenues. It would help our country become less dependent on foreign donors. It will lead to revenue enhancement and efficiency in service delivery to taxpayer. Also, ASYCUDA, as I earlier mentioned shall be rolled out to Lungi this year, with plans to get it rolled out to other border posts across the country.
There is therefore the urgent need for the public to always support the National Revenue Authority for national development. Development will always come with a price and the price here is public support for the revenue collection agency.
John Baimba Sesay, Freetown
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