There are chances of the National Revenue Authority (NRA) coming back on track with domestic revenue mobilization. This is said to be dependent on the pace of recovery of the global economy from the COVID 19 pandemic and associated effect. According to Budget Advocacy Network (BAN), it says despite the interruptions, NRA is still able to collect substantial domestic revenue according to the Network’s revenue analysis from the Accountant General’s Department monthly fiscal report (January July 2019 and 2020).
In the midst of COVID 19, NRA collected above Le 500 billion in June 2020. Due to the COVD 19 pandemic, the government of Sierra Leone reduced its domestic revenue target by Le1.1 trillion for the Fiscal Year 2020 from Le6.47 trillion to Le5.39 trillion. Le3.1 trillion has already been collected so far from January to July 2020 which is 57% of the revised target.
This implies that on average, NRA has been able to collect the sum of Le438.9 billion on a monthly basis, says BAN and in this regard, the average monthly collection based on the revised target is Le449.91 billion. They however, noted that if at least Le10 billion is added by NRA on the current average, they might hit their revised target for 2020. “Historically, NRA collects more revenue in the 2nd Quarter (Q 2) the latter carries the highest weight of the annual target. If this same pattern continues, it would further increase the chances of NRA hitting the 2020 revised revenue target.”
The analysis indicates revenue loss in the first and partly second quarter of 2020, some of the reasons for the slow gains the Network says is attributed to NRA’s flexibility measures in handling payment plans for business entities to be able to comply in paying taxes without recourse to jeopardizing their economies.
This is reducing the monthly revenue collection among other issues. There is an indication based on the trend that the NRA would likely hit their 2020 revised domestic revenue target if the trend of collection continues to improve in Q4 (current revenue to GDP stands between 1/8 and 1/21 of domestic revenue to GDP per month on average) NRA collected more revenue in the first seven 7 months of 2019 than they did in 2020 for the same period by Le 106.4 billion This indicates that the COVID 19 has an effect on domestic revenue mobilization For the month of June 2020 NRA collected over Le 500 billion, which is higher than the same period in 2019.
For the months of April and May 2020, NRA collected below Le 400 billion, which is lower than same period in 2019.
Based on the data for seven (7) months revenue mobilization trend, they concluded that NRA might hit their revised 2020 domestic revenue target if on average they are able to collect at least Le 449.91 billion for the remaining months (August to December 2020).
By Zainab Iyamide Joaque