the
government is losing vast sums of money each month because of excessive
tax exemptions.
Olympio Attipoe, commissioner-general of South Sudan’s National Revenue
Authority, said unidentified individuals had threatened to have him
fired after he revoked the tax exemptions of big companies — exemptions
that had been pushed by high-ranking government officials.
"These are people who are trusted by his excellency, the president, to
support his vision,” Attipoe told South Sudan in Focus. "They are not
doing their work. They are busy running around. We have been here, the
threat is going on. They don't want the system to work because they are
benefiting from the chaos."
Attipoe said
the revenue authority was collecting far less revenue than it should.
"At times we collect 1.5 billion [South Sudanese pounds] and we grant
exemptions of 3 billion. At times what we are losing to tax exemption is
more than 200% of what we are collecting," he said.
Attipoe said
some exemptions are granted to allow nongovernmental organizations and
U.N. agencies to provide humanitarian assistance to citizens, but many
others are granted to companies and individuals hired by the
government.
A June 14th letter seen by South Sudan in Focus — written
by Mayiik Ayii Deng, a minister in the office of the president, and
addressed to Finance Minister Salvatore Garang — requests that the
National Revenue Authority exempt the RAK Resources Group from paying
taxes. The company is described as an indigenous construction company.
The letter states the company planned to import factory service
equipment, medical items, fuel, agricultural and petroleum products,
construction materials and food worth more than $491 million U.S.
The letter states, "In reference to the government's policy on promotion
of local enterprise, and the president's commitment to provide enablers
to revive the economy, I am requesting your esteemed office to grant
tax exemption on the above mentioned imports."
Garang Majak Bok, first undersecretary in the Finance Ministry, wrote a letter approving that request.
Doing 'the right thing'
Attipoe revoked the exemption after learning from social media and other
sources that the RAK tax exemption request had come from Deng.
"The letter was written by somebody in the office of the president to
the minister [of finance]. The relevant issue for people to know is that
as an institution we are autonomous and we are determined to do the
right thing. It is not a matter of who is involved," Attipoe told VOA.
The South Sudan tax commissioner declined to say how many exemptions he
had revoked so far, but said he’d also revoked an exemption for the ABMC
Thai Construction Co.
Juba-based
economist and University of Juba lecturer Ahmed Morgan said granting
exemptions to big companies like RAK Resources Group negatively affects
the country’s development.
"If every business begins to apply for exemptions — and I know some
companies are worth millions of U.S. dollars — if custom duties are 25
percent of that value, you see how much money is lost," Morgan told
South Sudan in Focus.
Morgan also said granting tax exemptions to huge firms can create
monopolies in the marketplace, making it impossible for other firms to
compete.
He said all exemptions should be granted in a transparent manner.
"They are not done transparently. Items to be exempted should be known
— which companies are to benefit from exemptions and why — but if things
are done in the dark, it is very difficult. Government has to come with
accountability measures," Morgan said.
Several attempts to reach Deng for comment were unsuccessful. He was traveling in the United States.
VOA