President Salva Kiir has warned some states and government institutions against interfering with non-oil revenue collection in the country.
Kiir’s remarks appear to be a response to a heated debate during the 5th Governors forum where the delegates accused the national revenue authority of overstepping its mandate.
In May, the NRA conducted a three-day workshop in Juba attended by all the state governors and chief administrators to clarify which level of government should collect what tax.
The meeting resolved that states should continue collecting the person’s income taxes.
The national revenue authority was to lend support to the states by developing a viable system to enable the states to collect tax efficiencies.
On Friday last week, the Governors’ Forum also resolved that state governments should continue to collect the Personal Income Tax of state employees.
“NGOs are also clarified within the system where we have the national staff and local staff regardless of where they are recruited and what the state needs are those staff that fall under the state clarification,” one of the participants said.
“If this is what the law has stated, they are completely different based on our understanding. So we feel like the national revenue authority is encroaching on the mandate to the state revenue authorities.”
“This issue of the personal income tax has to be suspended. The national revenue authority should allow the states collecting the PIT until this issue is resolved between the national government and the states both in constitution making process and the other laws,” another participant added.
In response to the governors’ concern, President Salva Kiir warned some states and government institutions against interfering with non-oil revenue collection.
“I want to repeat that the laws can clash between the state and national government or between and at the local level. But this thing cannot be resolved now until the constitution amendments are made,” Kiir said.
“As a country governed by the rule of law, the Taxation Act, 2009 should be respected, strictly adhered to, and the National Revenue Authority, which has mandated to administer it, should not be interfered with by any national, state or county level.”
For his part, Dr. Patrick Mugoyo – the Commissioner General of National Revenue Authority – admits contradictions between the state and national laws.
“I am just a tax administrator. I administer the law. So this is a policy issue for example that needs to be addressed by changing or amending the taxation act so that it is exempt or it leaves certain types of wages to the states but currently it does not do so,” Dr. Patrick said.
“According to a circular issued recently, it is to the extent that the state taxation law contradicts the taxation act. Those provisions are not binding.”