INTRODUCTION The act of the National Revenue Authority came into being on 13 September 2002. The National Revenue Authority has a mandate to administer and collect all taxes, revenues and all penalties as stated in the NRA act. The purpose of the National Revenue Authority is to serve as a central body for the collection and assessment of national revenue.
The implementation procedures and policies by the National Revenue Authority will ensure that revenues are collected efficiently by enforcing specified laws through the provision of robust administration. However, the capacity of the NRA was inadequate to efficiently perform its mandates and mobilize the revenue needed for the socio-economic development. Against this background, several donor organizations including Dfid opted to support the capacity building drive of the NRA.
This study focuses on Dfid as one of the major donors supporting the NRA. I will attempt to analyze the impact of Dfid intervention in NRA, with specific focus on staff capacity and revenue mobilization. IMPACT OF DONOR FUNDING ON THE OPERATION OF NATIONAL RENVENUE AUTHORITY With Dfid funding in July 2009, to strengthen the performance of NRA through ensuring compliance with international trade agreements, improving business processes and developing staff capabilities.
Crown Agents was contracted to provide technical assistance to the National Revenue Authority (NRA) in the Modernization Plan to target a benchmark wherein the institution (NRA) transforms into modern and effective medium through which to secure vital state revenues and to ensure that the newly implemented Goods and Services Tax (GST) is viable and robust wherein NRA will have in place effective compliance management procedures. This reform program has designed to deliver efficient and equitable customs and tax administration procedures to target international practice.
Through its continuing support program to NRA, the Department for International Development (Dfid) has pledge its assurance to achieve the overarching poverty alleviation and the reduction of dependency on foreign aid through the effective collection of revenue which has gradually increase domestic revenue to build the nation from 65% dependency on foreign donors in 2000 to 40% in 2010. The modernization program carried out by crown agent sponsored by Dfid encompassing the following areas: ?
Integrated Revenue Management Program- This area focuses on Customs Modernization, Administrative Reform on Domestic Taxes, and the Implementation of Goods and Services Tax (GST). It also looks at the review of laws, procedures and structures to bring them in line with International best practice and to improve NRA’s revenue collection base. This modernization component will involve capacity building in improving taxpayers audit and compliance management and assist in the establishment of a new Domestic Taxes Department that will merge GST and Direct Tax operations. Human Resource and Institutional Development Program- This modernization program is aimed at developing the human and institutional resource base of NRA by equipping it with modern performance management systems and procedures. Information systems should be enhanced under this program, change management strategies and improved monitoring and evaluation systems throughout the organization. ? Taxpayer Information and Educational Program- This modernization program is aimed at changing the taxpaying culture in Sierra Leone through better information to the public and by assisting individual taxpayers to understand their tax obligations. Consolidation of the Strategic Management Program- This modernization program focuses on the development of the NRA’s Strategic Management capacity and institutional footprint with international procedures and policies. Having gone through this modernization program, Dfid contracted another agency known as United Nations Conference on Trade and Development (UNCTAD) in the provision of ASYCUDA to: ? Abolish the bureaucracy and administrative hard work for both the business community and NRA. ? Reduce the time used in processing and clearing of imported consignments under the previous manual system. Reduce revenue leakages and increases the collection of revenue ? Create transparency in the Customs administration of imports and exports departments in Sierra Leone. ? Assists the Customs Officers in providing consistent, fair and equitable treatment of all traders in applying the legal and regulatory framework ? Create equality and fairness among traders about response service and obligations. ANALYSIS ON THE IMPACT OF DONOR FUNDING ON THE OPERATION OF NATIONAL RENVENUE AUTHORITY Having looked at the impact of donor funding on the operations of National Revenue Authority (NRA).
Their involvement in developmental activities in strengthening the performance of NRA through ensuring compliance with international trade agreements is far yet to be achieved base on the modernization plan, but having said this, progress is on the way which has created an impact on the operations of the institution. Analyzing further, as to what the donor funds have done in the operation of National Revenue Authority may be highlighted below. ? Enable senior management to focus on the “strategic” issues, which will inevitably arise within individual Program and the overall Plan itself, leaving tactical decisions to middle managers. Minimize leakage and other revenue losses by reducing discretion, curbing smuggling, and instituting systems and control. ? Increase revenue collection by improving on the efficiency of the current revenue administration and then expand the revenue base by tapping into new taxpayers, facilitate trade, take advantage of opportunities and deal with challenges in the revenue administration environment. ? Reduce existing arrears to 5% using persuasion where necessary or litigation ? Improved and enhanced tax administration by computerization of operational and administration system. Develop and implement a robust monitoring and evaluation system ? Effectively monitor and control bonded warehouses to ensure compliance with laws and regulations, and verify inventories and internal controls on a quarterly basis. National Revenue Authority benefiting from donor partners has created an impetus on its operations. Therefore, having implemented all the modernization plans will help NRA to increase their revenue collection base by strengthening the capacity of staffs.
The introduction of GST under the integrated management program as one of the modernization plan has help NRA to increase the Domestic Revenue which has reduced the dependency of foreign donors in our economy. The launching of ASYCUDA will reduce the bureaucratic and administrative work on both NRA and the community in reducing the time spent on processing and clearing of imported consignments under the previous manual system. ASYCUDA will reduce revenue leakages and increase revenue collection and transparency in the Customs administration of imports and exports departments in Sierra Leone.
CONCLUSION Donor funding has increasingly affected the operation of National Revenue Authority in diverse ways and as a result, to that, revenue generation has increase tremendously, which has reduced the dependency on foreign donors. Modernization plan is a funded program by Dfid but contracted Crown Agent in the implementation of the plans and they further contracted UNCTAD in the provision of ASYCUDA in reducing revenue leakages and the increases revenue base. It further reduced the bureaucratic and administrative work on both NRA and the community. References: Revenue and tax Policy Unit- MOFED Modernization Unit- NRA Website
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