Parliamentary sitting. (Photo: Jemma Nunu/Facebook).

The parliament has passed a multi-trillion-pound fiscal year budget together with Finance Bill 2024-2025 which has sharply increased taxes, fees, charges, penalties, and other levies across various sectors, despite concerns from lawmakers about the potential burden on citizens and the economy.

The 4.2 trillion-budget was passed with a huge deficit amounting to 63% and exceeding available resources. The deficit will be covered that will be covered by finance bill’s wide-ranging levies – similar to that of a controversial tax bill that sparked unrests in neighboring Kenya

According to the charges presented by the parliament’s Specialized Committee on Finance and Planning, income taxes for government contract payments to residents including salaries and wages have increased from 5% to 15%, while payments to non-residents have risen from 5% to 20%.

The excise duty rate for water, including natural or artificial mineral water, aerated water not containing added sugar or other sweetening matter nor flavored, ice, and snow, has increased to 15% from 10%.

Meanwhile, taxes on agricultural machinery, including tractors, bulldozers, excavators, and rollers, have been reduced from 25% to 10%.

Non-alcoholic beverages have seen an increase in the excise duty rate from 20% to 25%, alcoholic beverages, spirits, and vinegar have risen from 30% to 35% while tobacco and related products will see a similar increase.

The excise duty on wood and articles of wood, as well as wood charcoal, has increased from 20% to 30%.

Under the finance bill, inspection service fees for frozen meat and fish per truck have risen from SSP20,000 to 400,000, while frozen chicken per carton has increased from SSP500 to 5,000.

Alcoholic beverages have also seen sharp increases. Inspection fees for whisky, gin, and wine per carton have risen from 1,000 SSP to 15,000 SSP each. The inspection fee for Uganda Waragi per carton has also increased from SSP1,000 to 15,000.

The inspection fee for gas cylinders per unit, which was previously 200 SSP, has now increased to 2,000 SSP.

On export goods service fees, honey per ton has increased from SSP1,000 to 20,000, hides and skins per dozen have risen to 2,000 from 100 SSP.

Gum Arabic inspection fees per ton have increased from SSP5,000 to 40,000, while charcoal per truck has increased from SSP50,000 to 150,000.

Timber per truck has risen from SSP10,000 to SSP500,000 while dry fish per truck has increased from 500 to 50,000 SSP. Coffee per ton now costs 2,000 SSP, up from 1,000 SSP. Fresh meat per ton has increased to 20,000 SSP from 5,000 SSP.

Other items include gold per kilogram, which has risen from SSP50,000 to 500,000, and malts per truck, which have increased from SSP5,000 to 20,000.

Inspection fees for sesame, groundnuts, sorghum, and sunflower have all increased from SSP1,000 to 20,000 per ton for each item.

The inspection fee for small and large shops has also increased. Small shops have risen from SSP10,000 to 20,000, medium shops from SSP15,000 to 25,000, and large shops from SSP30,000 to 40,000.

Meanwhile, small supermarkets will now face a fee of SSP65,000 to 100,000, and large supermarkets will be increased from SSP100,000 to 500,000.

In the hotel industry, inspection fee for five- and four-star hotels has increased from 120,000 to 2 million SSP, and for three-star hotels, from 70,000 to 1,500,000 SSP. Hotels with fewer than three stars will now be charged 1 million SSP, up from 50,000 SSP.

For bars, inspection service fee has risen from SSP50,000 to 500,000, while the restaurant inspection fee has increased from SSP35,000 to 50,000.

The inspection fee for large factories every three months will now be SSP100,000 up to 2.5 million.

– MPs concerned –

Throughout the third and final reading session, several Members of Parliament voiced their reservations, urging caution over the new tax hikes, which include higher fees for passports, business permits, and national certificates.

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

Hon. Nyang Johnson advocated for reduction in passport fees, stressing that such high costs for essential documentation would be unaffordable for many South Sudanese.

Beyond concerns over taxes, some MPs also called for increased funding in critical sectors like agriculture, health, and education.

A number of lawmakers pushed for a dedicated 10% allocation of the national budget for agriculture to bolster food security and support rural livelihoods.

The MPs urged allocation of the funds to prioritize modernizing farming techniques, providing seeds and equipment, and supporting agricultural training programs.

Others pointed to the pressing need for investment in health and education, sectors many believe have been neglected in recent budgets. The lawmakers also called for allocation of budget for the security sector.

But the Minister of Finance and Planning Dr. Marial Dongrin defended the new increased taxes and service fees, stating that South Sudan still has the lowest taxes in the world and in the region.

“Right Honorable, along with the members who have had the chance to go through the proposed Finance Bill and with all the discussions and amendments done, our taxes are not only the lowest in the region, but also in the world, and I’ll give an example.”

“If you take, say, a 30% tax rate on an item that is being imported into our country, there is what we call the effective tax rate. This is based on calculations that are done officially through customs valuation.”

“So, if we are taxing 30% of an item that is worth a hundred dollars, first there is the actual rate for converting $100 to pounds as currently.”