The Budget Advocacy Network (BAN) in its ‘2020 Revised Domestic Revenue and 2023 Revenue to GDP Target’ report has indicated that the National Revenue Authority (NRA) must raise at least 1.7% GDP per month on average in order to reach its target of 20% GDP ratio to revenue by 2023.
The Report was launched on Thursday in Freetown.
The report also mentioned that the government initial measures to slow the spread of COVID-19 combining with the global economic impacts have negatively impacted economic growth, raised price of commodities and undermined revenue collection.
The Senior Programme Officer for BAN, Abdulrahman Sesay said that on the average NRA collected between 1.08% and 1.23% of domestic revenue to GDP for the first seven months of 2019 and 2020, respectively, adding that if this trend continues NRA may not be able to hit the 20% revenue to GDP target by 2023, as the COVID-19 shock reversed their earlier gains.
“The revised domestic revenue target for 2020 is Le5.39 trillion representing 13.0% GDP. However, trend in the domestic revenue to GDP shows that NRA has raised Le3.1 trillion representing 7.6% of GDP for the first seven months in 2020 notably if this trend continues NRA will only be able to raise 12.97% domestic revenue to GDP by the end of the year there would be less than what was achieved in 2019 (14.3%) of GDP for 2019,” Sesay said.
The Assistant Director for Monitoring Research and Planning for NRA, Dr. Sheku Kamara, said that the measures instituted by government to stop the spread of COVID-19 have had a ripple effect on revenue mobilization and has limited the movement of people, affecting trade in the country.
He added that there are internal and external factor which affect revenue collection as most tax payers shipped their goods into the country at the peak of COVID-19. He added that flights were also halted and the number of cargo ship coming into the country has reduced immensely automatically reducing business activities in the country.
“However, in the midst of coronavirus, the NRA puts mechanism in place to counter the impact of the virus in revenue collection in spite of the prevalence of COVID-19, because of the revenue collection measures we are still experiencing the inflow of revenue,” he said.
Kamara said that because of the economic shock of COVID-19, it is likely that we might not be able to reach the 20% GDP ratio by 2023, coupling with the all revenue loss incurred. He furthered that he is optimistic that, in spite of all these the NRA would reach its targets with the mechanisms put in place.
By George M.O. Williams
28/10/2020. ISSUE NO: 7939