Hon. Nathaniel Oyet, the First Deputy Speaker of the parliament - Courtesy

First Deputy Speaker of the National Legislative Assembly Oyet Nathaniel has warned that the proposed taxes and levies in the fiscal year 2024/ 2025 budget may drive South Sudan to economic collapse.

Oyet raised the concern during the final hearing on the national budget which was passed on Monday with a finance bill that increased taxes and fees across various sectors including salaries, services and imports.

The 4.2 trillion budget was passed with a deficit amounting to 63% and several MPs raised concerns that the wide-ranging taxes will inflict a burden on citizens and the economy.

The finance bill presented by the parliament’s Committee on Finance and Economic Planning aims to generate additional revenue, as mandated by the Public Financial Management and Accountability Act of 2011.

However, the first deputy speaker Oyet Nathaniel said the consequences of the newly introduced levies will be felt by the ordinary people as they will increase the cost of goods and service and kill business.

“Now that we are adopting these taxes which will affect all the goods and services across the board, we are going to plunge the country into economic crisis,” he said.

“Starting from water to salt to sugar to meat, this must be clarified. In fact, reliance on taxes in an economy like ours, will risk economic collapse and we have to take it very seriously.”

Mr. Oyet further said the levies will worsen the current inflation by sending prices skyrocketing as traders will compensate their losses at the expense of consumers.

“We are going to introduce taxes to the people who have not been paid and these taxes obviously are going to hike the prices, and the taxes will impact the existing hyperinflation.”

“How you can introduce the taxes to cover the deficit without increasing the inflation? We have seen the scenario in the water prices. The water is fetched from the river at low price but by the time it reaches the consumer in Jebel Dinka, the price is 20 times higher.”

The Finance Bill 2024-2025 proposed sharp increase in taxes, fees, charges, penalties, and other levies across various sectors, despite concerns from lawmakers about the potential burden on citizens and the economy.

Throughout the deliberation, MPs voiced their reservations, urging caution over the new tax hikes, which include higher fees for passports, business permits, and national certificates.

Many lawmakers argued that the sharp increase in taxation could worsen economic challenges faced by citizens who are already impacted by the rising living costs.

Meanwhile, Finance Minister Dr. Marial Dongrin defended the new increase in taxes and service fees, claiming that South Sudan still has the lowest taxes in the world and in the region.

However, lawmaker Gai Mayen Luk questioned the comparison of South Sudan’s economic situation with other countries in the region as illogical.

“We know the original standards but those countries in the region. What are they doing? They’re not in the same economic situation, as South Sudan. The economies are doing well, so we cannot be raising our taxes to their level.”

“Their citizens are employed. They have jobs, they have purchasing power. But ours are not even getting salaries on time and they cannot afford to be subjected to the same situation as those who are in our countries.”

MP Mayen said every tax has been increased by at least 5% or 20% is abnormally high and will make it very difficult for the citizens because they will pay the price.

“Business people will add these taxes on commodities to the prizes and now our citizens are already having a very low purchasing power. Because of the development, they’re not receiving salaries.”