National parliament sitting. September 20, 2024 (Photo: Eye Radio)

JUBA, South Sudan (Eye Radio) — The Real Estate Association of South Sudan has told lawmakers that a proposed tax hike on rental income is a “note to investors to exit the country,” warning that the move will fuel corruption and kill local jobs.

Speaking during the public hearing for the Financial Bill 2025/2026 on February 12, association representative Mathiang Paul Mayom called on the Ministry of Finance to reconsider the move, which seeks to increase withholding tax on rental income and service charges from 20% to 30%.

Mayom, representing an advocacy body of 56 registered companies, highlighted that South Sudan’s current 20% rate is already an outlier. He pointed out that neighboring Kenya charges only 7.5%, while Uganda stands at 12%.

“To attract and retain investment, we need to reduce our rate from 20% to 10%,” Mayom urged lawmakers. “Maintaining regional competitiveness is essential. If you increase taxes, you are giving a note to investors to exit South Sudan.”

A primary concern raised by the association is the “cumulative tax burden.” Mayom explained that property owners are currently suffocated by overlapping jurisdictions, paying national, state, and municipal fees simultaneously.

These include city council town rates and municipal service fees, land administration and construction permit charges, and State-level taxes and national profit taxes.

He argued that the new proposal creates a “material risk of double taxation” by applying withholding tax to service payments, which are already subject to profit tax. He requested that the tax be legally confined to rental income only.

The association provided sobering data on the sector’s role in the national economy, saying the real estate sector accounts for at least 30% of South Sudan’s GDP, and related services account for 27% of employment, while the construction sector provides 13.7% of total jobs, ranging from engineers to masons and carpenters.

Beyond the numbers, Mayom warned that excessive taxation during a period of high unemployment and declining occupancy rates—driven by reduced demand from international organizations—would backfire.

“When you have high unemployment, how do you expect to charge people?” Mayom asked. “It will introduce malpractice and corruption. You will open a loophole for side businesses and dishonest agreements, and the little tax you were supposed to get in a dignified way will be lost.”

He concluded by urging the government to “drop the tax to lock people in,” arguing that lower rates would encourage developers to hire local workers and develop land, ultimately boosting the country’s infrastructure.