Aweil: A New Bill for Transparency and Efficiency in Tax Collection System

Feb 28, 2017

Members of the Aweil Finance and Public Accounts Committee meet in the State Legislative Assembly on 1 February 2017. Photo: ©UNDP

The economy of South Sudan is one of the world’s most underdeveloped and it is the most oil-dependent country in the world, with oil accounting for almost the totality of exports, and around 60% of its gross domestic product (GDP) according to the World Bank. Outside the oil sector, livelihoods are concentrated in low productive, unpaid agriculture and pastoralists work, accounting for around 15% of GDP.

Since 2013, South Sudan has been characterised by internal conflict which has been undermining development gains achieved since independence in 2011. From 2015-2016, GDP contracting by 6.3% and extreme poverty rate increasing to 65.9%.

As a new nation, the country faces the challenge of building formal institutions from a very low base and enhancing the capacity of government to formulate policy and implement new systems.

UNDP, with the support of the Government of Japan, is working together with Ministry of Finance and Economic Planning, the state ministers of finance and state governments to strengthen public financial management through the implementation of a new unified tax collection system.

Located in north-western South Sudan, near the international border with the Republic of Sudan, and with a projected population of 307,906 in 2016, Aweil state is one of the first regions taking action to implement this new system.

On February, members of the select committees of Public Accounts and Legal of Aweil State Legislative Assembly met at committee level to give finishing touches to the State Revenue Authority bill which aims to establish non-oil revenue system to enhance transparent and efficient resource mobilization and management.

“This bill will assure that the money collected from taxes in the state will go directly to state revenue consolidated accounts for public use and not to somebody’s pocket. It also establishes that any person found guilty of taking money and putting it aside from the government accounts will be prosecuted according to penal code of South Sudan.” said Hon. Santino Mayat Ngong, Chairperson of Finance and Public Account Committee in Aweil state Legislative Assembly.

The bill, which will be presented to the parliament in May, has been made under the powers granted to Aweil State Government of the Transitional Constitution of the Republic of South Sudan 2011 and the Transitional Constitution of Aweil State 2017 and is intended to establish minimum standards and uniform mechanism for the collection of taxes in the State.

“A board, composed of representatives of the Ministry of Finance, Bank of South and five private individuals with reputable background will be constituted to guide the state revenue authority on strategic issues relating to non-oil revenue mobilization in the state,” he continued.

According to the Ministry of Finance and Economic Planning, South Sudan faces challenges with effective management of financial resources. State governments are unable to mobilise sufficient revenue, budget execution remains difficult, and there are shortcomings in terms of transparency and the expected results.  Aweil’s fiscal year budget for 2016-2017 is 45,000,000 SSP.

“From now on we will know how to manage our resources, who is responsible for the process of tax collection, from the commissioners to the revenue authority’s staff, and there will be a penalty for those who take advantage of their position and take public money,” explained Hon. Monica Mawien, a member of the Aweil Parliament.

“Those who are making bad practices will not like this bill, but the state governments are welcoming this bill and they want it to be adopted so all revenue generated go into the revenue consolidated accounts. The tax system when establish will reduce the level of corruption and leakages in the revenue generating system in the state.  This will give enough fiscal space to the state government to provide their communities with what they need,” clarified Hon. Benson Opothmals, member of the Public Affairs Committee of the Aweil Parliament and Chairperson for Information, Culture, Youth and Sport.

Aweil bill 2Member of the committee reviews the Unified Tax Schedule for State Government of South Sudan in Aweil on 1 February 2017. Photo: ©UNDP

UNDP believes the legitimacy of government in the eyes of its citizens rests on the ability of governments to mobilize resources and allocate them in an equitable manner for service delivery to the populace.

“Our country is very young, and like any country it needs laws and systems in place in order to be accountable to the citizens. This law will make it possible for revenue to be generated in a transparent and accountable manner for services delivering for the people of Aweil. With an improved revenue collection system the local government will have the funds to face the community's challenges,” declared Hon. Ngong.

UNDP is planning to support the authorities throughout the process, from drafting the bill to its implementation.

Aweil bill 3Hon. Santino Mayat Ngong, Chairperson of Finance and Public Accounts committee in Aweil State Legislative Assembly. Photo: ©UNDP

“When the reform is approved, the staff from the revenue authorities need to be trained on the content of this bill, the structure, and the kind of work they will be doing from now on. They will have a lot of challenges because they won’t understand that before, they were the ones collecting the money and putting it in their pockets and now it goes directly to the bank, and the Ministry of Finance will be checking on them, so they will need training to know their new roles,” said Hon. Opothmals.

Every member of the Aweil Finance and Public Accounts Committee believes this bill will improve public service delivery, including the provision of education, healthcare and sanitation.

“If there is money in the state bank accounts then the Minister of Finance can say, look with this 5 million SSP we have in the public account, we will repair the roads and bring water to our citizens. If we have the money, then we can bring services to our communities. I am confident that if we implement this bill across South Sudan, our country will become financially stable,” said Hon. Ngong.