National, News

Gov’t urged to improve tax policy

By Bida Elly David

Economic experts are urging South Sudan government to reform the poor taxation system, tainted by malpractices and poor technological management.

The idea came on the third day of ongoing National Economic Conference in Juba.

The experts also said introducing clear guidelines and regulating tax procedures would not only ensure fairness but also encourage compliance among businesses and individuals.

This, in turn, they said could contribute to a more robust revenue base for the government.

South Sudan has the lowest tax ratio in the region at only 3.6% of Gross Domestic Product (GDP) compared to neighboring countries, according to the 2022-2023 regional comparative analysis. Tanzania at 16.3%, Rwanda at 15.03% and Kenya at 13.9 percent.

The low GDP has been attributed to the lack of a proper tax system and incompetent revenue officers.

Top on the list of critics of the current subsystem was Prof. Gabriel Mading of the University of Juba, who said the current policy does not favor the supervision and collection of revenues.

Prof. Mading also noted that there is no proper recruitment process for tax officers, resulting in unqualified personnel.

“There is no accountability in the recruitment of qualified tax officers by the government. If you go to the National Revenue Authority (NRA) now, you will find people with bachelor’s degrees in veterinary science and we don’t know what they are doing there,” he said.

He claimed that that recruitment of staff at the NRA happens through orders and command where high authority decides.

Prof. Mading also underlined that the tax audit process also lacks transparency, with private companies chosen by officials having conflicts of interest.

He questioned why the gov’t hires brokers to run tax financial transactions, saying that the practice will bear no tax growth.

“If you go into detail, these private companies are owned and shared by people working in the Ministry of Finance and the National Revenue Authority particularly,” he said.

“You will find that when you need tax consultancy, the same government officials give your business cards. This is why the tax system has failed.”

To address these challenges and boost economic growth, Prof. Mading urged the South Sudan government to prioritize implementing effective tax reforms and embracing technological advancements.

Former Finance Minister Aggrey Tisa Sabuni stated that corruption and nepotism plague the revenue department, preventing citizens from benefitting from the country’s resources.

“Tax revenue is the main pillar of the Country’s economy. Our major problems are conflict, greed, fatigue, vulnerability and tribalism. This fragile setting leads to a distortional economy,” he said.

He stated that tax officials have a bigheaded attitude that prevents them from being corrected and progressing.

Mr. Tisa pointed out that the ongoing economic fragility has been planted by the current leadership crippling the economic security.

Mr. Tisa stated that South Sudan primarily focuses on personal income tax (PIT) and customs, neglecting other taxes like value-added.

Experts recommend that the government introduce a tax security system managed by nationals to properly regulate taxes, that benefits the citizens.

        Athian Diing Athian, Commissioner General NRA (Photo Bida Elly)

Meanwhile, the Commissioner General of the National Revenue Authority Athian Diing Athian said tough tax measures have been introduced to regulate revenue collection and mitigate malpractices within the institution.

He said one of the reforms the NRA is going to implement is the conduct and disregard of tax exemption demands by some operating enterprises.

“We are going to review all the agreements exempting all subcontractors from paying excise taxes to the government to enable us to obtain positive reforms,” Athian said.

Mr. Athian admitted that South Sudan generates less revenue from domestic revenue compared to the regional countries.

“Regional Countries generate 50% to 70% of their national budget from domestic market mobilization meanwhile South Sudan generates less than 20% from domestic mobilization,” Athian said.

The Commissioner General stated that the NRA is going to fully enhance the in-depth integration of the electronic system to ease tax data entry.

Athian mentioned that other legal frameworks such as the introduction of verification-added tax, the introduction of a digitalization tax scheme against lotteries are measures to be implemented.

“In our policy reforms and measures, we are also going to tax lotteries, gaming and betting stations, introduce excise stamps,’’ he stated.

Mr. Athian underscored that the NRA is set to establish a tax special court aimed at resolving disputes among tax collectors and payers.

“Establishment of tax tribunal or special tax court will be an Alternative tax dispute mechanism between tax collectors and payers to solve their stand-offs,’’ he noted.

He called on the state government and other entities involved in taxation to cooperate with NRA for efficient revenue collection.

“With this, it will lessen the tax burden on taxpayers through multiple collections. We ask the government to help us in effecting anti-smuggling of goods and illicit trade,” Athian said.

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