May 2021
Countries all over the
world have reformed
or are attempting to reform
their tax systems with
the main impetus being the
increasing complexity of tax
codes, narrowing the tax bases
and concerns with horizontal
equity. Like many developing
countries, the Sierra Leone
tax system has undergone a
number of changes mainly in
terms of structure, processes,
and procedures. Firstly, these
changes are aimed at simplifying
the tax system, broadening
the tax base, and maximizing
revenue mobilization to support
government fiscal priorities.
It is also very interesting
how the NRA is integrating
digital technologies into thetax system thereby improving tax compliance, reducing administrative
burdens on taxpayers, and helping to support growth at an
unprecedented speed.
For the National Revenue Authority (NRA), the last three years has
seen a major transformation within the Country’s tax system. First
it was an upgrade and migration from the Automated System for
Customs Data (ASYCUDA++) which was a much slower and obsolete
version of a system that was supposed to be at the forefront of trade
facilitation in the Country. The current system is a more recent and
up to date version of the ASYCUDA system which is now known to
be the ASYCUDAWorld. The new ASYCUDA WORLD increases efficiency,
reduces the turnaround time in the Customs clearance path
and maximize revenue at the Customs Service Department.
In 2019, the Commissioner General Dr. Samuel S Jibao made a
bigger announcement on introducing reforms within the Domestic
Tax Department (DTD). The reforms would later turn out to be the
introduction of the Integrated Tax Administration System (ITAS)
which is a platform to register, pay and file taxes; and for the first time
in Sierra Leone, businesspeople will use Electronic Cash Registers
to account for Goods and Services Tax (GST) for taxpayers who are
already registered for GST.
Launched by the Minister of Finance- Jacob Jusu Saffa, the government
of Sierra Leone is visibly seen to be highly supportive of the
implementation of the ECR machines in Sierra Leone. At the launch
in October 2020, the Minister of Finance revealed they already provided
5000 cash Register equipment and server to enhance the roll
out of the project. Whilst the Government supports the draft of the
ECR regulations, the African Development
Bank is also supporting the ECR project
with a Resident Consultant to help with the
implementation and roll out.
TRAINING, TESTING, AND
INSTALLATION OF ECR
MACHINES
The National Revenue Authority has
concluded series of test and trainings on the
Electronic Cash Register to ascertain the
authenticity of the equipment. The User Acceptance
Test for example was ran to ascertain
whether the product meets specifications
for a successful implementation. The series
of test were followed by a series of training
involving taxpayers, NRA Employees and
other stakeholders especially all registered
GST taxpayers such as supermarkets, hotels,
guest houses, restaurants, bars, night clubs,
building materials stores, boutiques, saloons,
general merchandise, and other service providers, among others.
On the 6th of April 2021, the NRA commenced the installation
of the ECR machines. According to the Finance Act of 2020, the
installation of these machines is strictly compulsory, and individuals
should not be seen to be impeding the process. The National Revenue
Authority is therefore asking all registered GST taxpayers to input
all transactions into the machines and generate a receipt for each
transaction. The NRA considers It an offense should a taxpayer fails
to issue a GST receipt generated from the ECR Machines even when
it is not requested by the customer. The Commissioner General- Dr
Samuel S. Jibao has appealed to the general business community to
not tamper with the installation process of these systems, or willfully
damage the equipment. Doing so will be construed as impeding tax
administration for which a fine of up to Le 20 Million Leones and
or an imprisonment term of up to five years will be imposed on
conviction or both.
“We are aware that implementing such systems comes with a lot
of challenges in terms of technical problems or the knowledge or
procedures in operating the system and we are saying that Taxpayers
must notify the NRA in an event of fault or problems with the installation
and operation of the equipment within twenty-four hours so
that remedial actions will be taken by the Authority immediately. All
registered GST taxpayers must regularize their registration information
with the NRA for the issuance of a new Taxpayer Identification
Number (TIN) and must ensure that the ECR Machines are installed
immediately.