Sierra Leone: In financial year (FY) 2020, income tax receipts of Le1,998.2 billion were still the main source of domestic revenue, of which the major components were Personal Income Tax Le 1,556.7 billion and Withholding Tax-Government Contractors and Free Health Care Tax which amounted to Le 85.4billion and Le 7.3billion respectively.
However, total income tax receipts of Le1, 998.2billion increased by 8% or Le 143 billion over that of FY2019 and also compared negatively with the Budget target of Le2,274.3billion, resulting in a negative variance of 12% or Le276.1billion.
According to the Accountant General’s Department (AGD) the Government revenue for financial year (FY) 2020 was Le5,973.5billion, increasing by 6% over the amount of Le 5,643.8 billion collected in FY2019. This compares adversely against the budget target of Le 6,378.5billion, with a negative variance of about Le 404.9 billion equivalent to 6%.
The chart below illustrates the composition of domestic revenues for FY2020. Income tax revenue contributed Le1,998.2 billion or 34 % of the total domestic revenue for the financial year, whereas Goods and Services Tax (GST) revenue amounted to Le1,021.4billion or 17% of total domestic revenue.
Customs and Excise (C & E) Receipts was Le1,503.8billion or 25 % and Mineral Revenues Le258.0billion or 4% of total domestic revenue respectively. Fisheries revenue accounted for Le156.2billion which is 3% of total domestic revenue.
Personal income tax revenues increased by Le 12 billion and a marginal 1% compared to Le1,554.6 billion in 2019. This is because of increases in PAYE- Government Employees, Withholding Tax-Free Health Care, and Withholding Tax-Government Contractors.
Under the Finance Act 2020, a national health insurance levy was imposed at a rate of 0.5% on the value of all contracts relating to the supply of goods and services in support of the Free Health Care Programme. This increased the Government’s collection from its contractors by Le7.3billion.
The Goods and Services Tax (GST) totalled Le1,021.4 billion in FY2020, decreasing by 2% below that of FY2019. This reflects the steady growth in the economy as well as removal of some of the tax exemptions. However, there was an adverse variance of Le213 billion or 17% against the FY2020 Budget target of Le1,235.2billion.
There was an increase of 14 % in the Customs and Excise (C & E) Receipts, which totalled Le1,503.8 billion. This was as a result of increased revenue streams particularly towards the Petroleum Excise Duties and other stringent measures within the customs department.
Mineral resources revenues increased by 9% from the previous year, equivalent to Le 21.5billion but 20% below the budgeted target of Le 322.1billion. Other revenues such as Fisheries increased slightly by 9%,which is below the 15% gained in previous year. Other Departmental Receipts and Road User Charges saw a decrease by 6% and 3% respectively. This is mainly as a result of the negative effects of the COVID 19 pandemic. However, this was cushioned by the inflows of both foreign and domestic donations made directly to the National COVID 19 Emergency Response Centre, totalling Le 41.2billion.
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