January 27, 2013 (JUBA) – South Sudan’s Finance Ministry says it has completed a move to harmonise differences that previously existed between the central government and country’s ten states over management of locally generated tax revenues.
In a statement extended to Sudan Tribune, the ministry said it reached an understanding with all South Sudan states’ finance ministers, and agreed that the latter will provide additional compensation under the centralised collection policy.
Under this arrangement, however, the proposed surcharge on personal income tax will reportedly be removed from pending legislation, thus preventing state-level employees from paying national and state income tax.
This retention, the ministry argues, will increase funds available to the states and assist in meeting their budgetary needs.
“This agreement allows us to continue to harmonise our federal and state tax systems and ensure that we do not return to the harmful system of roadblocks and multiple layers of taxation, thus helping our economy and country grow toward self-sustaining levels,” partly reads the statement, signed by South Sudan Finance Minister, Kosti Manibe Ngai.
The ministry, however, insists the national directorate of taxation will continue to collect personal income tax from private employers, including Non-Governmental Organisations (NGOs), as the exclusive authority for those collections.
In addition, the directorate and the state taxation authorities, it says, will support the centralised collection policy, coordinate and cooperate in improving tax collection all over the country’s ten states.
Last year, the Governor South Sudan’s Central Equatoria state, Clement Wani Konga, threatened to withdraw his state from the centralised taxation system, claiming his administration had lost significant funds from locally collected revenues.