The National Revenue Authority NRA was set up in 2002 by an Act of Parliament primarily to assess and collect revenues on behalf of government, facilitate trade and improve border security through customs. The setting up of the Authority followed a trend in which most Anglophone African countries were transforming their revenue administrations from the civil service to semi-autonomous authorities with legal and managerial autonomy. This period also followed the end of the civil conflict in 2002 in which the need to set up an institution to generate revenues domestically and sustainably was a necessity particularly as the country was primarily donor driven, predictability of such funding was a challenge. Several administrations have evolved following changes in political governance and it is therefore no surprise that with recent changes in the political landscape ushering in the Presidency of Julius Maada Bio in April this year, that we had a change of administration at the NRA commencing with the appointment of a new Commissioner General with wealth of experience in revenue administration and strong research and academic standing in the economics of taxation.
The governance arrangement had been a challenge in recent years, with several top level management positions vacant. To meet the demands of modern revenue administration, the need to fill these vacancies was a priority for the new administration; and soon after a new Board was instituted, all these vacancies were filled, including the position of a Deputy Commissioner General, which had been vacant for eight (8) years. The filling of other vacant positions ensured the Authority was fully capacitated at the management and strategic level for effective revenue administration.
A typical characteristic of the new government of President Bio has been political commitment to revenue collection, consistent with the Manifesto of the New Direction, in a manner that has been more assuring to the NRA than had been previously experienced. Political support has been evident from the State House, Parliament and the Ministry of Finance (MoF), as the supervisory Ministry for the NRA.
Legislations including two finance Acts (Amended 2018 Finance Act and 2019 Finance Act) that make provision for additional revenue mobilisation, and the Extractive Industry Revenue Act that consolidates fiscal provisions across the mining and oil and gas sectors were all approved by cabinet and enacted by Parliament with much ease.
For long NRA had faced challenges of consolidating revenue collection across government agencies despite having the primary responsibility for revenue collection as enacted in the NRA Act of 2002. Whilst a significant step was taken in 2017 to enact a Fiscal Management and Control Act (FMCA 2017) to ensure the key agencies of government that had been collecting and retaining government revenues do so through the consolidated revenue fund, the implementation of this Act only gained fruition upon the declaration of an Executive Order (EO1) by President Bio few days after he assumed power in April 2018. In this EO1, he ensured the implementation of the Treasury Single Account and FMCA 2017 by making sure all revenues in their accounts and ensuing collections are deposited into the Government Consolidated Revenue Fund (CRF) and accounted for by the NRA.
Additionally, this EO1 ensured excesses in duty-waiver concessions to non-conventional beneficiaries were put on hold and later dealt with on a case-by case basis, thus guaranteeing substantial reduction in customs waivers,subsequently improving collection in the form of import duties and import GST. The government took the very difficult undertaking to remove fuel subsidy, which had been a strong condition of the International Monetary Fund and other traditional donors for any budgetary support and revival of a programme of economic support to the country.
Consistent with political will in revenue collection was the positive impact of the President’s choice of the new Commissioner General, a tax expert who combined academia and experience in revenue administration to implement strong revenue mobilisation measures to raise revenues the government so direly need in the short term as well as pursuing revenue administration reforms geared towards sustainable mobilization of revenue. Since the new government assumed governance in April 2018, not only did they inherit a challenging economy, but had to wholly depend on the collection from the NRA to run its administration and implement flagship projects. The entire budget of the government for the first eleven months of the year did not receive any budgetary support from traditional budget support donors, thus resting the entire burden of running the government on revenue collected domestically. To this end, the new CG had no option but to closely monitor revenue collection, track arrears due both from State Owned Enterprises (SOEs) and the private sector companies that were previously difficult to comply.
The effect of these measures and the political will from government yielded a 30% improvement in domestic revenues for the first three quarters of 2018 compared to same period in 2017. For the first time in as many years, the NRA collected more revenues in the third quarter of the year than the previous quarters without any one-off inflows.
In the quest to introduce an Integrated Tax Administration System (ITAS) to automate and integrate domestic tax administration, government had secured a credit from the World Bank through the Public Financial Management (PFM) project to implement this system.
In addition to the signing of the ITAS contract, there has been notable progress in the migration of customs administration from the use of ASYCUDA++ to the web-based ASYCUDA World system.
With sustained political will, a revamped governance arrangement, a capable administration and implementation of major revenue systems reforms, the NRA and the prospect of domestic revenue mobilisation can only be assured to be in the right direction.