Freetown, SIERRA LEONE – In a bid to meet revenue targets for the fiscal year 2023, the government has unveiled a series of initiatives aimed at enhancing compliance and maximizing revenue generation. These measures, detailed in the Medium Term Revenue Strategy (MTRS) for 2023-2027, encompass a range of strategies to bolster tax collection and financial oversight.
One significant aspect of this plan involves collaboration between the National Revenue Authority (NRA) and the Finance Ministry. The government aims to deduct Pay-As-You-Earn (PAYE) obligations owed to the NRA directly from the allocations of state-owned enterprises (SOEs), Treasury Single Account (TSA), and Sub-Vented Agencies. This move is anticipated to streamline revenue collection processes and strengthen financial discipline.
To further ensure effective revenue mobilization, the government plans to leverage data analytics within the Integrated Tax Administration System (ITAS) portal. Additionally, a comprehensive taxpayer education campaign is set to be launched, alongside the implementation of block registration for businesses in regional cities, aimed at expanding the tax base. Enhanced monitoring of business establishments, with a focus on enforcing the use of Electronic Cash Register (ECR) machines, is also on the agenda.
Successful implementation of these measures is projected to yield an additional 0.2 per cent of GDP in revenues. The government has committed to meeting the targets outlined by the International Monetary Fund (IMF) by finalizing the harmonization of domestic and imported excise rates, revising excise rates, implementing the minimum alternate tax, regulating the annual vehicle circulation fee, imposing surcharges on cellular services, and revising GST exemptions by the end of November 2023.
According to the latest report, the government is actively working to increase tax revenue mobilization. The Medium Term Revenue Strategy (MTRS), developed in collaboration with the IMF and World Bank, and approved by the Cabinet in April 2023, outlines various tax policy measures. These include a review of the corporate income taxation system to boost revenue and encourage investment, the initiation of a transition to a Global Income Tax system, full implementation of a Minimum Alternate Tax, and broadening the GST base through the streamlining of exemptions.
The MTRS further proposes maintaining excises on fuel at a fixed and predictable rate, converting ad valorem excise taxes into specific taxes, harmonizing rates for locally produced and imported excisable goods, enforcing the vehicle circulation tax, and institutionalizing a policy against negotiating fiscal incentives for greenfield investments in the extractive sector.
In addition to tax policy measures, the MTRS includes tax administration measures designed to enhance taxpayer registration, strengthen tax compliance, improve auditing, enhance compliance risk and debt management, and refine customs valuation processes. These initiatives collectively underscore the government’s commitment to creating a robust and efficient revenue collection system for sustained economic growth. ZIJ/6/12/2023