As a country, South Sudan loses over 1 Billion South Sudanese pounds every month due to the unfavorable existing government tax exemptions policies that do not favor the country’s national growth through revenue collections. The Director General of customs service Gen. Akol Ayii Madut revealed that a lot of items are being brought to the country and haven’t been taxed at any one point. this raises alarms to the responsible authorities.
After a decade of independence, South Sudan’s economy grew, with gross domestic product (GDP) estimated at 9.5% in FY2019/20. However, due to falling oil prices in the global market, and concurrent shocks to GDP growth in FY2020/21 is projected to contract by -4.1%.
The COVID-19 pandemic and climatic conditions are also exacerbating poverty, access to services and general living standards for many South Sudanese.
Existing government policies and established laws, only humanitarian agencies are allowed to import items without taxes, but the senior ministry of interior official is saying several powerful individuals in the country have been importing items without taxes.
This has made the country every every month to lose 1.2 billion SSP in term of exemption that include on road construction equipment, the United Nation humanitarian goods exemption to mention but a few.
The country is now losing a lot of money on this exemption. compared to our neighboring countries like Uganda and Kenya, exemptions have been misused in South Sudan
One of the senior government officials further accused UN agencies of importing non-essential goods such as alcoholic beverages which he said are not included in the Status of Forces Agreement (SOFA) that are liable to taxation
The SOFA agreement is not actually being control because most of the UN cars after the end of the contract, they are supposed to be given to the government but they are now auctioning them and they came under exemption which is wrong.
Despite the turbulent efforts tha downplay the given situation in the country, a Look ahead must be to ensure the countrys economy to recover provided that the authorities adhere to agreed upon reform priorities.
A World Bank Economist also said that the developments in the oil sector will continue to play a critical role, but favorable climatic conditions and peace and security are also essential elements. Recent advances in the development of a COVID-19 vaccine have raised hopes that the global economy could recover faster, which should support a sustained uptick in oil prices, more foreign direct investment, and remittances for South Sudan.
It should be noted that the signing of the most recent truce in September 2018, and subsequent formation of the Revitalized Transitional Government of National Unity (R-TGoNU) in February 2020, had provided hope for recovery and peace building. Nonetheless, South Sudan still faces the risk of reversing these gains, with increased incidents of concurrent shocks and the intensity in subnational violence that threatens stability.
In all these, the World Bank’s new economic analysis for South Sudan recommends support to agricultural investments and fast-tracking economic reforms as critical for sustainable food security.
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