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Sierra Leone News: NRA must collect Le414b in two weeks to meet revenue target

The National Revenue Authority (NRA) will be under pressure to intensify tax collection after latest data show a balance of Le414,714 billion that must be raised before the end of December to meet predicted targets.
At a briefing with the tax authority, yesterday 19 December 2017, at the NRA office on Wellington Street, they spoke about their target and other key reforms they have been undertaken and the prospect of meeting their target of 2017.
So far the NRA has received a total of Le3,014,578 trillion in taxes up to 15 December 2017. This is against a target of Le3,429,292 trillion set for the NRA by the International Monetary Fund (IMF) revised target of September representing a negative variance of Le414,714 billion remaining. The National Budget Speech tax revenue target was Le3,468 trillion.
The tax authority has been grappling with ambitious targets that have always been set for them. According to the Assistant Director of Monitoring, Research and Planning Department, Mohamed Foday, “The target are most times subject to several revisions based on the circumstances they envisage and can be revised upwards or downwards. It was in preparation of the new Extended Credit Facility (ECF) program that we realised a huge funding gap in the Ministry of Finance and Economic Development (MOFED),” said Foday.
As a result of this, he said, for them to close the gap the revenue target was revised upwards and they were anticipating that additional revenue will be gained in the mining sector as well as the parastatals dividend.
They were also advised to institute stringent measures on the application of duty free with the assumptions that more money will come from these areas moving the target from Le3,468 trillion to Le3,639 trillion.
These assumptions, according to Foday, didn’t hold as the taxes were not as forthcoming as they had hoped. The mining companies were expected to be using the best available market price in the sales of their mining products and the implementation of very stringent measures on duty free application to really maximise revenue in that direction.
Whilst acknowledging these negatives, a report was presented to IMF and MOFED, which eventually led to the target to be revised downwards to Le3,429 trillion.
This breakdown from NRA only shows the final reconciliation of quarter one and two with three and four yet to be completed at their transit banks across the country and the Accountant Generals department, “so after the last two quarters reconciliation the revenue will increase.”
The performance translates to 83% of the projected target. This performance is as a result of delay in the enacting of the Finance Act 2017 in June, as the revenue measures contained in the Act are to be used to collect revenue at the beginning of the year.
They were also expecting more revenue from royalties from the underground mining by Koidu Holdings, which only commenced this November.
The Non-Tax Revenue Department has collected Le380,768 billion against the yearly projection of Le354,237 billion giving an over-performance of Le26.5 billion. The Customs Service Department has a projection of Le987,002 billion but has only collected Le870,116 billion with a shortfall of Le116,886 billion. According to the NRA, there was a marked reduction of goods clearing the ports and imports are down from previous years because of the looming elections.
The negative variance of Le324,358 billion in the Domestic Tax Department is as a result of the delay and denial in remitting the Pay-As-You-Earn (PAYE) and the non-compliance towards GST.
Foday said that this year is a very unique one because it has the highest revenue target. Their monthly average is over Le 250 billion, weekly is over Le 62 billion and a daily collection is over Le10 billion.
The revenue targets for the previous years are as follows: in 2013 it was Le2.212 trillion, 2014 was Le2.174 trillion, 2015 was Le2.235 trillion and 2016 was Le2.799 trillion.
ZJ/19/12/17
By Zainab Joaque
Wednesday December 20, 2017.

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