Since 2008, the NRA has embarked on several result-oriented reforms through its Modernization Programme to automate and simplify its tax administration processes, and amend old laws to augment domestic revenue mobilization. A major component of the Modernisation Programme is the reorganisation of operational departments by core functions rather than tax type. The Authority has successfully implemented the following reforms under its Modernisation Programme:
Human Resource Management (HRM) Project
In an effort to move the Authority to a level where it can thrive on professionalism and international standards and uphold the values of equity, transparency and integrity, a Human Resource (HR) consultant was hired in 2008 in order to upgrade the HR processes and procedures of the NRA, modernize HR policies and implemented a computerized human resource management system. This led to a review of our HRM structure and policies and Codes of Conduct. A new Human Resource Management Manual and a staff appraisal system were also developed.
Formation of the Goods & Services Tax (GST)
The Goods and Services Tax (GST) Act was enacted in 2009 to replace seven less efficient consumption taxes which are Restaurant and Food Tax, Entertainment Tax, Hotel Accommodation Tax, Import Sales Tax, Professional Services Tax, Domestic Sales Tax and Messages Tax. Despite numerous challenges, GST was introduced in 2010 and helped increased the Authority’s revenue base.
Issuance of Tax Identification Number (TIN) to taxpayers
This reform replaced the manual filing system that posed series of drawbacks ranging from duplications and constraints in taxpayer identification, long searching time and misplacement of files. Taxpayers can now be identified by their unique identification/reference numbers and it is now possible to have a single view of a taxpayer’s tax position at all times and hence simplifying the provision of data and information on taxpayers. For ease of doing business, a wireless connection has been established between the Office of the Administrator and Registrar General and the Domestic Tax Department (DTD) to facilitate the issuance of TINs. Furthermore, a business survey was conducted in 2013 to update our business register.
TIN is used by taxpayers for almost all of their tax activities with NRA and is a requirement for registering new businesses as well as for clearing goods/consignment at customs via ASYCUDA++. It is further used for the issuance of tax clearance certificates, assessment and audit purposes.
Customs Modernization/ASYCUDA++ Project
The introduction of the Automated System for Customs Data (ASYCUDA++) at the Quay in April 2010 was aimed at reducing Customs clearance time and addressing revenue leakages. The system was successfully rolled out to the Lungi International Airport in November 2012 is being rolled out to Gbalamuya in the Kambia district. The ASYCUDA++ system allows for direct trader input (DTI) that minimizes staff-taxpayer interface and increases efficiency. To compliment the system and support its effectiveness, we established 4 functional units at customs—the Valuation, Risk Management, Post Clearance Audit, and HS classified and ‘Rules of Origin’ units— in July 2011. As a result, clearance time at the Quay for low risk importers has been reduced from seven days in 2009 to five days in 2010 and currently to two days or less
Creation of Domestic Tax Department (DTD) Project
The Domestic Tax Department was established in 2011 from a merger of the Income Tax and GST Departments which created a one-stop shop for the provision of both income tax and GST services to our customers. DTD staff can deal with both income tax and GST issues at a time. This saves time, eliminates duplication of roles and reduces cost. Plans are underway to subsume the Non Tax Revenue (NTR) Department and the Excise Unit to DTD in the next few years. The creation of the Domestic Tax Department has yielded greater increase in the domestic revenue collection drive of the Authority as revenue GDP ratio sharply grew from 12.6% in 2010 to 14.9% in 2011.
Payments of taxes through Commercial Banks
In July 2011, the NRA first signed MOUs with 13 Commercial Banks to enable taxpayers pay their taxes through the Banks for subsequent remittance into the Consolidated Revenue Fund (CRF). In 2013, we signed revised MOUs with transit banks due to challenges of reconciliation and timely remittance of revenues to the CRF in the previous year. We now have online viewing access to all our transit accounts to aid reconciliation and monitor remittance.
We have facilitated the consolidation of the Income Tax Act of 2012, the Enactment of the Goods and Services Tax Act of 2009, the Customs Tariff Act of 2011 and the passing of several Finance Acts. Currently, the Authority is reviewing the legal framework of its administration to address the inconsistencies and ambiguities in the GST and Income Tax Acts with a view to drafting a single Revenue Administration Act that will minimize barriers to revenue collection. Further, the Extractive Industry Revenue Bill is being finalized for parliamentary ratification. The Bill has the advantage of drawing together all the fiscal regimes in the extractive industry into one document for ease of administration. It also empowers the NRA as the sole collector of revenues for this sector. The Authority has established an Extractive Industry Revenue Unit (EIRU).
Information and Communication Technology (ICT) Project
The main focus of the Authority is on ICT sustainability, which includes capacity building and wider use of ICT skills in the operations of the Authority. In addition to the successful implementation of the ASYCUDA++ project, the Authority has deployed the “Great Plains” as a secured computerized financial and management accounting system to ensure transparency and effective tracking of revenue transfers from transit banks to the Consolidated Revenue Fund (CRF) at the Bank of Sierra Leone (BSL). A computerized human resource management system has also been installed. Another significant development in the NRA’s modernization programme is the automation of manual processes in the Domestic Taxes Department (DTD) with the introduction of modern computer system such as the VIPS for the effective operations of the Goods and Services Tax (GST), the DTIS for improved income tax administration, the NTRS for enhanced extractive mineral operation of the Non Tax Revenue department and the TIN for the issuance of unique tax identification numbers. There is also a wide area network in place that connects most NRA offices in Freetown. This has significantly cut down on communication cost and enabled sharing of ICT equipments. The Authority is on the verge of extending the wide area network to its provincial operations.
Securitised GST Receipts Introduced
GST is a self assessment tax which relies on taxpayers reporting voluntarily on a monthly basis their returns on taxable supplies and activities. Following a Board request, our Research department undertook a desk research on GST performance and challenges since its implementation and came up with recommendations on how the Authority can improve on its revenue collection from GST. The recommendations led to the implementation of GST securitised receipts in 2013 to maximize tax take and minimize revenue leakages. This new invoicing system provides NRA with information on the average sales of businesses and creates greater opportunity to monitor taxable transactions which will subsequently strengthen controls and boost compliance.
Our Customer Service Charter
NRA’s continued success depends on the quality and range of services we deliver to our Taxpayers. Hence, the Customer Charter represents a move on the part of the NRA towards a customer-focused operation. It provides information on what we do and the standard of service expected from us. As such, it sets out a range of commitments in areas such as service reliability and punctuality as well as provision of information on services and response times to enquiries and complaints. This means we ourselves, taxpayers and other interested parties can evaluate our performance. [See Publication Section for details of the Customer Service Charter].