South Sudan steps up efforts to end tax collection malpractices.

September 15, 2011 (JUBA) -- The newly born Republic of South Sudan says it will seek to end malpractices in the tax collection system which have resulted in the loss of hundreds of millions of dollars through unauthorised tax collectors. A committee formed by the President of the Republic, Salva Kiir Mayardit, to investigate the situation has revealed that unauthorised multiple levies and taxes on essential imported goods and services are also causing skyrocketing of prices in the new country. The committee, chaired by the former minister of Energy and Mining, Stephen Dhieu, who is also the newly appointed minister of Petroleum and Mining, reported to an economic cluster meeting chaired by the Vice President, Riek Machar, that the committee found 44 authorised and 65 unauthorised tax collection institutions operating in Eastern and Central Equatoria states alone. Different unauthorised agencies and individuals have set up tax collection points, demanding "tax" from business people who import goods, but then are pocketing the money. Officials also revealed that even some of the authorised personnel of various institutions only report some of the revenues to the government chest. Hundreds of millions more have been lost to the indiscriminate exemption of taxes since March this year, some of which were unlawfully done, according to the officials. After lengthy deliberations by the government's economic cluster since last week, the body on Thursday confirmed to review the policy on exemptions at the next Council of Ministers meeting. It was also resolved that a revenue authority be established at the national and state levels and harmonise systems of tax collections between the various levels of government. Immediate removal of unnecessary checkpoints and roadblocks as well as elimination of illegal tax collecting units from all border entries and checkpoints was resolved. There is also a need to establish a mechanism for screening and licensing of clearing agencies and encourage the establishment of bank branches at international borders for direct deposits and wire transfers. The need to use a Letter of Credit by the Central Bank in the export and import processes was also encouraged. It was also resolved that the national ministry of finance with involvement of the national security and police regulate the transfers. More than 60 international entry points were also identified across all ten states of South Sudan except Lakes state which has no international border. The leading among them is Upper Nile state with 25 entry points with its international borders with Ethiopia and Sudan where four states have borders with the state. South Sudan is largely dependent on oil revenue, which accounts for 98 percent of its budget. With some reform in the tax collection system, officials hope that when implemented the revenues collected from non-oil revenues will increase. (ST)

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