The South Sudan Revenue Authority (SSRA) is considering a major overhaul of its tax system, proposing a transition from the current “sell-tax” to a Value Added Tax (VAT) model.
According to tax chief this move, discussed at a recent leadership meeting at the SSRA headquarters, aims to address the country’s low tax collections and align its financial framework with regional standards.
The push for a new system stems from the belief that the existing sell-tax has failed to generate sufficient revenue.
A presentation by professors from the University of Juba, led by Dr. Abraham Kuol Nyuon, outlined how a VAT system could significantly increase tax prosperity and help South Sudan meet regional financial benchmarks.
VAT is a consumption tax collected at each stage of a product’s supply chain, with the final consumer ultimately bearing the cost.
This method is widely seen as a way to broaden the tax base and create a more stable revenue stream.
Speaking during the discussions, Tuesday SSRA Commissioner General Simon Akuei Deng advised stakeholders to adopt and implement VAT in a staged manner to minimize economic disruption.
This approach Akuei emphasized would allow businesses and consumers to adapt, starting with a simplified system and gradually expanding its scope and rates over time.
To support this transition, SSRA boss has instructed all commissioners and assistant commissioners to reduce expenses by 20% to alleviate financial strain on the authority.
Meanwhile, a five-member committee, supported by a legal team, has been formed to investigate the implementation of the new system.
The involvement of legal experts is crucial to ensure that any new tax legislation complies with existing laws and protects the rights of taxpayers, a key step in building public trust.
This initiative aligns with broader national efforts to diversify revenue streams and improve fiscal management, reducing the country’s historic reliance on oil revenues.