‘Our Tax Reforms Have Increased Growth, Reduced Poverty’-Samuel Jibao

‘Our Tax Reforms Have Increased Growth, Reduced Poverty’-Samuel Jibao

Thursday, September 19, 2019 1:35 pm

Dr. Samuel S. Jibao, Commissioner General of The National Revenue Authority- NRA

Dr Samuel Jibao is presently President Bio’s points man in the current economic recovery program to reposition the inherited broken economy toward the right trajectory. In this interview, he reveals the strategies so far toward achieving a successful journey

How would you describe the contributions of NRA to the economy of Sierra Leone?

Any strong and decisive government has to envision financing its public expenditure primarily from domestic revenues rather than depending on the unpredictable and conditional donor funding. Whilst donor budget support still has a strong presence in the Sierra Leone government budget, domestic revenue contribution has been on the increase and in 2018, with a new administration in place, total receipts (domestic revenue and grants) increased to73% of the government budget from 62% the previous year; of which domestic revenue was 64% of total government budgeted expenditures (compared to 52% in 2017). This implies, NRA’s increasing contribution to financing the public budget has its consequential impact in promoting long run economic growth and reducing poverty through increased government spending in public infrastructure and human capital. By mobilising more revenues, the fiscal space for government to spend more in pro-poor sectors and economic enhancing avenues is enhanced. It is important to know that the function of the NRA is not only limited to revenue mobilisation, and therefore our expanding reforms at customs through the implementation of an easy to use and more transparent ASYCUDA World system and its associated functionalities in January 2019 has been helping in making the clearance process simpler and transparent thus reducing cost to importers and facilitating trade. Our recent reforms at Customs to operate on weekends and extend the banking hour have only further helped facilitate trade since importers now have extended time to clear and pay for their goods thereby helpingto expand trade in the country and by extension economic growth.

To what extent does the NRA collaborate with Sierra Leone Anti-Corruption Commission in the fight against corruption?

The anti-corruption commission (ACC) remains an important stakeholder in the revenue generation function of the NRA. Eliminating leakages in revenue collection is just as important as expanding the tax base. The national mandate of the ACC in tackling corruption in public sector is in direct congruence with our aim to reduce leakages through controlling corruption in revenue collection. In this respect, the NRA has an MOU with ACC, which guarantees that we collaborate in this function. Since I took over the reigns of leadership at the NRA, I have instructed several audits and investigations geared towards improving controls, reducing leakages and corruption and improving staff integrity.

The NRA also has an integrity committee that works closely with the ACC and that leads on monitoring implementation and reporting on NRA aspect of ACC’s Anti-Corruption Strategy. Recently, the Board of Directors approved the establishment of an Internal Affairs Unit to directly serve as the Anti-Corruption unit of the NRA and will liaise directly with ACC. The NRA is currently trying to operationalize it whilst the World Customs Organisation through NORAD provides technical assistance in its setting up.

Tax evaders normally funnel their monies to tax haven. What measures are in place to stop them from avoiding paying taxes?

Multinational companies, despite many of them participating on the stock exchange, tend to not only avoid paying taxes, but even evade them. Base Erosion and Profit Shifting (BEPS) is one main avenue that multinational companies have been using as tax planning measure to avoid paying taxes. In a region where information on the operations of such international companies is hard to access, this makes it difficult for Africa as a region to tackle such practices. I know the African Union and Africa Tax Administration Forum(ATAF) have been working to get consensus and enhance the capacity of the region to tackle such practices. At the level of Sierra Leone, we are signed up to the OECD’s Inclusive framework on BEPS, which helps member countries collaborate in implementing measures to tackle tax avoidance, improve the coherence of international tax rules and promote a more transparent tax environment.

Further, government has recently taken a strong stance on controlling and monitoring repatriation of proceeds from economic activities in Sierra Leone to other countries. Collaboration,both domestically and internationally, is usually the preferred option to handle such practices. In this regard, the NRA is on the verge of signing an MOU with Financial Intelligence Unit (FIU) to exchange information on financial intelligence including that on MNEs. Related to that is the recent effort the NRA and FIU are making in strengthening currency declaration administration at the airport.

Multiple taxes have been fingered as one of the reasons for the high rate of closure of SMEs. What is the experience of Sierra Leone?

The Sierra Leone Economy has experienced enormous challenges since the twin shocks of EVD outbreak and collapse of international commodity prices in 2014. Even SMEs that may not be directly engaged in mining activities received the rippled effect of collapse of the mining companies and its subcontractors, which trickled down to their businesses. This together with the reduced demand associated with the EVD outbreak led to closure of several SMEs since.

The SMEs regime has a special tax regime and therefore do not pay what the large taxpayers typically pay as taxes. They fall within what we refer to as ‘trades’. Such taxes are paid based on sales turn over, even though SMEs may opt to pay based on profits. Therefore the allegations that taxes are hurting SMEs in Sierra Leone is hardly anything to trust.

To what extent do you factor in the concerns of the private sector in formulating tax policies?
Tax policies are formulated by the Ministry of Finance (MOF) and enacted by Parliament and not the NRA. The NRA rather implements what has been formulated. Probably, the question is better fitted to MOF rather than NRA. However, as the NRA most times participates in the policy formulation through advising on the compliance impact of policies proposed as well as in assessing the revenue implication of some of these policies.

Given the level of the informal economy, what is being done to expand the tax base?
The informal sector is quite large and therefore getting them into the tax net helps in considerably expanding the tax base.
The Authority is gathering data of registered business from several third party sources with the aim of matching that information to identify taxpayers/businesses that may not have been registered with the NRA.
The country has recently signed a grant support with the AfDB to implement a tax compliance enhancement project including the implementation of a Domestic Tax Preparer(DTP) scheme to support the record keeping and returns filing abilities of SMEs.

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