Aweil State faces tough climatic and economic challenges. Rough terrain and poor roads infrastructure, especially during the rainy season, hinder access to markets and supply of essential goods and services in all areas. Provision of basic social services, such as education and health services, remain poor while delivery of other essential services is an unmet need. Hence, investment in infrastructure and social service delivery requires considerable investment.
The Aweil State Revenue Authority (SRA), launched in 2017 with support from UNDP’s Public Financial Management project and funded by the Government of Japan, recognises that the effectiveness of local tax collection cannot be undervalued in combating the state’s development challenges. A transparent, fair and efficient tax system is fundamental to securing the resources to support provision of basic social services in a state that is rated among the poorest, yet one of the most peaceful, regions in South Sudan.
The SRA administers the state’s tax system and is responsible for putting tax laws into practice. Since its inception in 2017, the Authority’s primary focus has been to increase non-oil revenue, including tax revenues, while at the same time providing a better service to the state’s residents. The state aims to raise adequate revenue to close the existing financing gap between the local tax that is collected by SRA and the transfers made from the national government in Juba.
According to the State Minister for Finance and Public Service Hon. Majok Kual, the state’s budget for 2017/18 fiscal year totaled 281 million South Sudanese Pounds of which 21% is locally generated through SRA collections.
“The funds that come from Juba are barely enough to meet salaries, essential services and development interventions. If we want to do development, we must look for other sources of income,” Hon. Majok explains.
To help the state government boost its income, SRA is using four essential instruments of revenue collections: sales tax, personal income tax, aircraft landing fees, and timber sales. The funds so far collected from all four sources in the current fiscal year amounts to roughly 50 million South Sudanese Pounds. Building roads, minimum pay raise, and renovations have been identified as top priorities of the state be financed from locally raised resources.
Roads are vital to any development endeavor and Aweil State is not an exception. Roads are the veins through which the economy flourishes. Roads link producers and their buyers to markets for exchange, workers to jobs, students to schools, the sick to hospitals, and enhance security.
In the current fiscial year, the state government was able to finance rehabilitation of three roads around Aweil town. These include the road from the airport to the city centre, the road leading to Aweil Hospital, and the road linking the slaughterhouse (abattoir) to the marketplace, which all received full maintenance.
“The roads to the hospital and the abattoir were unusable during the rainy season. Not the case any more after rehabilitation,” says Kual Garang, a motorist and local Aweil resident.
“We are all happy. Because of the renovations, cars and motorcycles no longer get stuck in the mud for days, accidents have reduced, and I can drive my car to any part of the town without fear of getting stuck in the mud or sudden breakdowns,” Kual explains.
The benefits arising from local taxes are also apparent at the community level. The monthly minimum government wage in the state was previously 200 SSP for unclassified jobs. Since the government can generate more local revenue, this has now changed. Out of the SRA raised tax money, the government doubled the salaries of its low-income employees, thus increasing the monthly level of the minimum wages to 400 SSP.
The State Secretariat building that remained unmaintained for almost fifty years is currently undergoing major renovation by a locally contracted company, with state revenues collected. The old and rusty roofing sheets are being replaced with new ones. The ramshackle building will soon be relaunched in its new look. With more SRA’s resources, additional public buildings are scheduled to be renovated.
John Akeen Akol, Commissioner General of Aweil State Revenue Authority, underscores that improving revenue performance is the primary objective of the Authority. However, while the taxes are successfully collected at the state capital level, parallel effort must also be geared at all the counties within the state.
The progress and success in local tax collections in Aweil State are attributable to many factors. There is an explicit and sustained political commitment from the state government; a team of capable, hardworking SRA officials dedicated their full-time to tax administration reform; a well-defined and appropriate tax collection strategy is in place; and relevant and technical capacity building was offered to the SRA staff through UNDP support and Government of Japan funding.
According to Commissioner Akeen, the SRA has plans to allocate additional resources for improving tax administration and incentives for both taxpayers and tax administrators. He said such steps will help SRA augment its revenue collections, provide higher value to citizens—and ultimately improve government credibility and efficiency in the provision of social services
“We now have tangible results to show to our taxpayers, but what matters more as crucial next steps are awareness-raising about the potential benefits of the locally collected taxes targeted at the public, the private sector, transport operators, retailers, government departments, NGO practitioners’, professionals, and other stakeholders,” says Commissioner Akeen.