Sierra Leone NRA collected a record Le400 billion in taxes in September 2018

Sierra Leone Telegraph: 1 December 2018:

In September 2018, Sierra Leone’s National Revenue Authority (NRA) collected over Le 400 billion for the first in its history, but needs to double this trend by 2023, if the 20% of domestic revenue to GDP ratio is to be achieved by the government, says campaign group – Budget Advocacy Network.

The government’s own target as set out in its New Direction Strategy paper, states: “In the New Direction, the focus will be to increase the domestic revenue GDP ratio from about 10% to 20%.”

And during the state opening of the 5th Parliament of the 5th Republic of Sierra Leone, President Bio told the people of Sierra Leone that: “Our domestic revenue make up only 11.5 percent of GDP and is one of the lowest in the World”

The Budget Advocacy Network and Action Aid Sierra Leone see the government’s commitment as very vital for the delivering of essential social services, especially the Free Quality Education and Free Health care, and as  such are tracking this commitment on a quarterly basis.

It is also a way of making information on the revenue collection transparent so that citizens can hold duty bearers accountable for commitments they make, says the Budget Advocacy Network.

This is the latest Budget Advocacy Network Report:

The data used for this tracking is the published monthly statement of the Consolidated Fund which include actual revenues and expenditures done by the Accountant General Department and published on the Ministry of Finance (MoF) Website.

This second publication looks at data for three (3) months before the Bio administration and six (6) months after. (January to September 2018). The Gross Domestic Product (GDP) used is Le 31,722 billion.

The methodology used in the first edition to calculate the average daily revenue collection has changed. In the first edition, we used the monthly revenue collected divided by the number of days in the month.

In this second edition, we used the monthly revenue collected divide by the total working days in the month excluding weekends and public holidays.

NRA has made impressive revenue collection from April to September hitting  Le 400 billion in September 2018 for the first time.

If NRA is to hit their domestic revenue collection target  for 2018 which is 14.3% of the GDP (which is likely base on the past 4 months trend), they will need to collect additional 1.2% of GDP  annually in the subsequent  years to hit the 20% target by 2023.

Using the projected nominal GDP figure for 2021 (excludes iron ore), Sierra Leone should collect more than Le 832 billion per month starting 2021 to hit the 20% of GDP by 2023.

This amount is more than twice what NRA  collected in September 2018.

Average daily domestic revenue collection rose from Le 16.27 billion in March to Le 20.24 billion  in September 2018.

Income tax increased from Le 124.67 billion in March 2018 to Le 170.41 billion in September 2018.

Revenue collected from customs and excise increased by more than  two-fold from March to September 2018.

GST also increased from Le 54.74 billion in March to Le 80.30 billion in September 2018.

The impressive increases in revenue mobilization could be attributed to the successful implementation of the Government Executive Orders released in April 2018, related to revenue mobilization and closing of leakages.

Mineral resources decreased by two-fold from March to September 2018. Other departments and petroleum product excise duty increased by two-fold from March to September 2018.

Overall, monthly domestic revenue collection increased by Le 96.74 billion from March to September 2018.

So where is the money going?

From April to September 2018, government has consistently spent within its revenue collected and this shows prudent financial management. (spend what you  collect).

Expenditure on wages, salaries and employee benefit increased slightly from Le 160.44 billion in March  to Le 163.56 billion in September 2018. This slight increased could be attributed to the establishment of new Ministries, Departments and or Agencies.

Non-salary, non interest recurrent expenditure  increased from Le131.89 billion in March to Le 165.45 billion in September 2018.

Domestic development expenditure decreased from Le 44.82 billion in March  2018 to Le 7.01 billion in September 2018.

National Revenue Authority increased it domestic revenue collection by Le 96.74 billion from March to September 2018 hitting over Le 400 billion per month for the first time in the history of Sierra Leone.

If this same trend continues (Additional Le 96.74 billion every six months), NRA will likely hit the target of 20% of domestic revenue to GDP by 2023.

To  achieve this, NRA should be supported to speedily implement the proposed reforms as stated in the 2019 budget speech.

Some of these reforms include: Automating Tax Collection Processes and Procedures; strengthening Tax Compliance; collection of Tax from Self-employed Professionals; review of Duty and Tax waivers; implementation of the Extractive Industry Revenue Act (EIRA) 2018.

In addition, NRA should continue to reduce the revenue leakages and use the existing laws to enforce revenue collection. With more resources, the social sector will be adequately financed and hence citizens will access to available and safe public services.

The Sierra Leone Telegraph notes that what could also be frustrating the government’s efforts in curbing public spending, is the vast number of ghost workers employed in the public sector.

According to reports, the Sierra Leone’s National Civil Registration Authority has discovered 9,785 ghost workers on Government payroll and subvented agencies.

The Director Generation of the NCRA,  Mohamed  Massaquoi informed local reporters at the national biometric verification exercise briefing session.

It is reported that during the ten years of APC rule,  6,238 had duplicated pin codes; 71 persons with more than one pin codes,  727 verified duplicated new registration, 307 personnel file and 88 non-existent pin codes have so far been discovered.

The United Kingdom is the largest bilateral aid donor to Sierra Leone. In 2018/2019 the British government gave Sierra Leone £132.5m.

About Budget Advocacy Network

The Budget Advocacy Network (BAN) is a Network of Civil Society Organisations in Sierra Leone committed to work on budgets and budget policies to enhance policy making and implementation for sustainable and equitable development.

BAN was established in 2006. BAN consists of local and international organizations such as the Campaign for Good Governance (CGG), Network Movement for Justice and Development (NMJD), Western Area Budget Education Network (WABEAN),  Action  Aid  Sierra  Leone  (AASL),  Search  for  Common  Ground  (SFCG),  Christian  Aid  (CA)  and Transparency International (TISL).

6 Comments

  1. This success story is like a double edged sword; on one hand blocking the leakages and on the other hand creating shortages of cash supplies that was usually pumped in the economy by corrupt government officials and businessmen who were evading taxes.

    I personally believe that during this festive season some opposition to the current government may try to blow the trumpet of “there is too much hardship under this new direction” just to create more disdain towards this new president.

    So I hope this good news and the news from the IMF will start trickling down to the general public, otherwise the high ratings that the president and the anti corruption czar are now enjoying will start going south.

  2. Congratulations president Bio and the SLPP for your achievements so far. Your addministraction has tremendously done well. Nonetheless Mr. President, be careful with the Chinese, they are crafty Set of people.

  3. Clear,unambiguous,unequivocal leadership are mostly the determining factors whether or not a venture/operation will succeed or not, even in cases of life and death.

    It does appear that President Bio has an unmitigated determination to bring about fiscal discipline to the nation which has been overdue since the late nineteen sixties, when Siaka Stevens appeared on the scene with his gang of APC thugs who were not willing to listen to the brilliant finance minister at the time – Dr Mohamed Sorie Fonah, who was making waves for the country both at home and abroad.

    President Bio must see The Budget Advocacy Network as a boon to society and embrace them tightly. In so doing he would save himself the massive headache of doing budgetary analysis himself with the aid of incompetent and corrupt civil servants with a tendency to conceal some of the statistics, since that’s how they embezzle [“chap”]state funds to build mansions and order the latest series in cars.

    The Sierra Leone Telegraph’s input on ghost workers should be taken very Seriously by President Bio. It epitomises the financial leakages which is helping to hamstring the economy and deny the government the ability and capacity to provide much needed social services.

    When the Koroma government was in power,for example,there was much fanfare about ghost teachers being uncovered by the then Deputy Minister of Education – a certain Dr Jah. At the next reshuffling of the cabinet Ernest Koroma removed him. The substantive minister of education, Minkailu Bah, was left in place. What does this suggest? The ghost teachers should rise again from their respective graves to continue receiving salaries.

    My word,the forthcoming commission of inquiry will reveal uncountable ghosts from different sectors, not to mention echoes from the past that will land some big fish in our frying pan.

    Has the President paid any attention to our sea port? He should. There are first class kleptomaniacs there, forcing importers to spend a considerable time to clear their goods with monies that never reach government coffers. Shake that place up President Bio.

  4. Revenue mobilization at the local level is still a nightmare as people are loath to paying tax. The payment of the head or local tax of a minimal five thousand leones per annual remains a challenge in most rural communities. Civil Society should play a key in ensuring that people live up to.their obligations before agitating for their rights.

    What the NRA is doing at the national level must be complimented at the local in order to promote the development aspirations of the local communities.

  5. My questions is where is all that money going. Instead of increasing wages why won’t the government improve infrastructure. Light in sierra Leone is still unstable, the roads still need improvement.

    The free education is an okay plan but there are significant things that need more consideration. Take a look at connaught hospital in Freetown, people are dying there every second of the day. Fix the healthcare system first, and provide jobs for citizens.

    What is the purpose of going to school if there are no jobs. It only leads to criminal activities which is it at highest ever in sierra Leone. The solution is to solve the most pressing issue. Do not focus on bullshit to gain political point so you will spend more time in power. The is what done by the corrupt previous government of president Ernest Koroma.

    So many issues need immediate attention, but no President has really prioritized them to solve the pressing issues rampaging sierra Leone, instead they beat around the bush.

    List of pressing problems: Healthcare (fix connaught Hospital), light system, provide meaningful jobs (with meaningful jobs student will be motivated to attend school), and then focus on your fake free education (free education is actually isn’t true, it’s all based on political propaganda); fix the roads ( there is no proper drainage system, granted this is why so much flooding has been taking place; stop smuggling timber ( fix the environment, so much deforestation); improve agriculture ( millions of Sierra Leoneans have abandoned agriculture, this has caused a massive dependence on foreign foods. What a disgrace. Sierra Leone doesn’t export any sort of agricultural based food.

    Dependency on foreign aid has caused problems. The government of Sierra Leone truly needs to ask itself what sort of development is good for the people of sierra Leone. Besides, why is it that so many foreigners are buying and owning vast amount of land in sierra Leone. About 30% of sierra Leone land is owned by China, majority of this land are based in natural resource rich areas.

    Again this goes to show the extent of corruption in sierra Leone. I do not directly blame President Bio, but I blame his appointed corrupt ministers, especially ministers of lands and agriculture as well as ministers of health. These are some of the most corrupted of all.

    Fix Salone. It’s been a long haul and the people are crying. Enough is enough!

  6. It’s a clear indication that Mr Bio is achieving in his administration looking at the revenue report. Congratulations to SLPP administration and we encourage you people to keep it up as we monitor from distance.

Tell us about your views

This site uses Akismet to reduce spam. Learn how your comment data is processed.