By Mabinty M. Kamara
A new report launched on Monday has revealed that 67.3% of taxpayers in Sierra Leone have no confidence in the way tax proceeds are managed, hence their reluctance to pay.
The report titled: “The 2019 Tax Perception Survey Report” looked at perceptions that are hampering the collection of tax in Sierra Leone. It was developed by Public Finance Monitoring Consortium, which comprises the leading civil society and advocacy organizations in financial and economic management, including Budget Advocacy Network, Christian Aid, and Restless Development. The initiative was funded by UK Aid.
This latest report comes less than a week since the group launched the findings of a similar survey on the accountability deficit at the National Revenue Authority (NRA) between 2014 and 2017. The NRA was among four institutions covered in last week’s report.
In his presentation of the new report on Monday, Euan Davidson, Team lead of the consortium, explained that the survey was undertaken to understand taxpayer’s perception on the taxes they pay, their knowledge on the taxes they pay, knowledge on the tax system, and their level of confidence in those handling they tax proceeds.
“It is also important to understand taxpayers’ wider view of government and how this relates to their attitudes and motivation towards paying taxes,” Davidson added.
The survey targeted a total of 2, 755 businesses across the 16 administrative districts of the country and achieved a response rate of 98%, according to the group.
A portion of the report also states:
“Like in the case of the NRA, reasons for nonpayment of local taxes were assessed in the survey and the data shows that the common reason why businesses do not want to pay local taxes are : (51.1%) believes that the tax rates or levies were too high for business growth and that (67.3%) believes that business did not see what the money was being used for in our communities, whiles 32% have the perception that revenue was being misused by government/corruption and that there were multiple taxes levied on the same product or service which according to them has lots of negative effects on their businesses.”
President Julius Maada Bio has made revenue mobilization through tax a key priority of his administration.
In light of this, the NRA aims to collect Le6.4 trillion in taxes this year.
This is also part of government’s priority to achieve a domestic revenue to GDP ratio target of 20% by 2030.
NRA has complained for years that tax compliance was a major challenge. In a press conference last week, the Authority announced a new scheme to encourage Small and Medium Enterprises to pay tax.
The Head of the Domestic Revenue Department at NRA, Dr Ibrahim Sories Kamara, said they were hoping to collect Le250 billion in taxes from SME’s this year.
Davidson said for NRA to achieve its targets, the way forward was to embark on more sensitization to build the confidence of taxpayers.
“The fairness of the tax system is not the reason why businesses pay local taxes, which suggests that more sensitization is required at the local level, to build confidence of the tax payers in the system,” he said.
In response to some of the findings in this latest report, Philip Kargbo, Director of Research and Policy at the NRA, noted that the Authority was working on getting a more realistic and comprehensive tax register that would capture businesses across Sierra Leone.
He however rejected suggestions in the report that they duplicate tax charges.
Kargbo also said he was sure that the government was using the proceeds from taxes for the benefit of Sierra Leoneans.
“The NRA collects taxes and once we collect the revenues, we hand it over to the Ministry of Finance. And to reduce the human interface between our collectors and the taxpayers, since 2011 we introduced the bank payment system where all payments are made at commercial banks and if there is an issue involving our staff, we invite the ACC to investigate the issue,” he said.
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