Looking at the NRA beyond revenue collection
The development of a nation depends on a number of factors. These factors could be political and social. But from the standpoint of present day realities, especially for developing nations like Sierra Leone, Liberia and a host of others, the level of revenue generation at the local level of gigantic importance. Practically, one may also argue, that the support that developing nations have continued to gain from development partners like the World Bank, European Union, DFID and the African Development Bank will also serve as a catalyst for change and development. (Photo: Haja Kallah-Kamara, NRA Acting Commissioner-General)
Take Sierra Leone as a practical case study. This is a small country, with less than 7 million people, in the West African sub region that experienced one of the ,most brutal civil wars in the African continent. Efforts were embarked upon to see an end to such a civil war.
Sierra Leone is in a post war reconstruction period. In line with this, post war institutional reforms were initiated aimed at ensuring things move the way they should and that was how the National Revenue Authority came into being. 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. But to what extent has this particular function been achieved over the years? Let us start with the revenue collection effort aspect. A lot has happened and much is still happening. 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.
Practically, since it was created, the National Revenue Authority has continued to generate revenue on behalf of the central government. Trying to do some comparative analyses in terms of revenue generation between 2002 when the agency was established and 2010, it is common truth, 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.
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. 2010 SAW AN UNPRECEDENTED REVENUE COLLECTION EFFORTS BY THE NAR, UNDER HAJA KALLAH KAMARA. With a target of 930 billion, the agency exceeded the target by over 20 billion Leones.
However, the NRA should be looked at beyond the responsibility of generating revenue for government. The agency should be discussed also from the perspective of how it has continued to ensure a tax friendly environment, facilitating trade and in also helping to minimize if not stop smuggling. 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 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 Board, Management and staff.
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. With these and more facts in mind, please stay tuned as we move towards observing International Customs Day.
Coupled with these developments, the NRA has merged the Income Tax and the Goods and Services Tax department under one umbrella, known the Domestic Tax Department. This is aimed at ensuring 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. So, as a matter of fact, the NRA has continued to play a crucial role in Sierra Leone’s development agenda and it is definite, that this role will always be played for the betterment of Sierra Leone.
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