The Minister of Finance and Economic Development, Dr. Kaifala Marah while presenting the 2016 Budget and Statement of Economic and Financial Policies to Parliament on Friday 6th November commended the Board and Management of the NRA for  the Authority’s  impressive revenue mobilization drive despite the effects of Ebola. Total domestic revenues collected in the first half of 2015 he disclosed amounted to Le 1.17 trillion or 5 percent of non-iron ore gross domestic product (GDP).

Dr. Kaifala Marah noted that domestic revenue collection was seriously affected when iron ore exports, a major source of fiscal revenues collapsed with the falling prices of iron ore in the world market from an average of US$96 in 2014 to US$56 in September, 2015; and the subsequent closure of the two iron ore mining companies in the country. He said despite uncertainties in the iron ore mining sector and the diverse effect of the Ebola outbreak on the economy, NRA’s revenue performance in the first half of 2015 was impressive. Collections from the goods and services tax (GST), income tax and customs and excise duties were all remarkable. Le445 billion was collected as income taxes compared to a target of Le421 billion which indicates an excess of Le24 billion. With a total collection of Le297 billion, GST was also above target by Le32 billion. Collections by the Customs and Excise Department amounted to Le282 billion compared to a target of Le257 billion hereby exceeding revenue targets by Le25 billion.  Overall, the NRA was able to collect Le 1.17 trillion.

Dr. Kaifala Marah attributed this remarkable performance to the gradual recovery of other sectors of the economy—the non-iron sector of the economy—as well as the stringent tax enforcement strategies being undertaken by the NRA to augment revenue collection.  He commended the Commissioner-General of the NRA, Madam Haja Kallah-Kamara for her exemplary leadership. Since taking over office in 2009, Madam Haja Kallah-Kamara has spearheaded a modernization programme that encompassed staff development and professionalism on the premise that a highly trained and well paid staff is necessary for a well functioning tax administration that discourages corruption and maximizes revenue collection; and systems automation to build an effective, transparent and accountable tax system.

From the 2016 budget, the Authority is expected to collect Le2.56 trillion or 10.4 percent of GDP encompassing corporation taxes, personal income taxes, GST, import and export duties, excise duty on petroleum products, mining royalties, licenses etc.  The Minister of Finance Dr. Kaifala Marah said the ministry and the NRA would sustain efforts to strengthened revenue mobilization strategies and transparency in the tax system.  He identified several strategies to be embarked on to increase revenue collection which he said would be introduced on the 2016 Finance Bill. This includes:

Ensuring that ministries, departments and agencies (MDAs) make provision for import duty in their budget for all contracts that are subject to taxes.  
Reviewing duty concessions to NGOs, the tourism sector and road construction companies. Already, all duty and tax waivers and exemptions including waivers for petroleum products require prior approval of Parliament due to provisions in recent Finance Acts.
Increasing the top Pay-as-you-earn (PAYE) marginal tax rate from 30% to 35% to make the tax system more progressive. This he hastened to add will only affect those earning monthly incomes of above Le2.0 million.
Applying the existing commercial fuel price regime to the retail pump price to ensure a full pass-through from international prices, exchange rate movements and other inherent cost in the formula. This it is hoped would minimize loss of government revenues and remove distortions in the domestic petroleum market as total revenue loss from the current retail pricing formula amounted to Le113.1 billion as at October 2015.

In addition to the tax policy measures cited above, the NRA, Dr. Kaifala Marah stated is expected to proceed with its modernization programme. He noted that DFID has approved a 3-year ‘Revenue 4 Prosperity’ programme support to the NRA which would enable the implementation of strategies to strengthen revenue mobilization and transparency in the tax system. This includes building capacity for specialized revenue audits in the mining, financial and telecommunication sectors; implementing the Small Taxpayer Regime to improve compliance of the hard-to-tax sector; developing and implementing a revenue accounting and reconciliation system to improve the effectiveness of the reconciliation process with transit commercial banks and the central bank; expanding its automation drive to improve service delivery and curb fraud and tax evasion. As such, in 2016, the NRA is expected to introduce an integrated tax administration system and migrate from ASYCUDA ++ to advanced customized management systems for customs operations, introduce electronic cash registers that will interface with the Authority’s Tax Online System to allow real time capture of transactions which eventually would enhance GST compliance by reducing under-declarations or unauthorized receipts and hence increase revenue collection.