Africa-Press – South-Sudan. Following Sudan’s split, old policies are reactivated, and new policies are implemented. When it became an independent state more than a decade ago, there was a notion of reducing its total dependence on oil revenues as territorial disputes brawled between the two Sudans along the borderline following the Heglig (Panthou) clashes. This culminated in a shutdown of oil production in 2012 that later prompted the government to embark on increasing non-oil revenues to finance its budgetary deficit as oil revenues declined due to the global drop in oil prices.
The primary source of the additional revenue is from the taxes that are embedded in the Taxation Act 2009 and the amendments. Since the establishment of the National Revenue Authority as a body responsible for the collection of non-oil revenues in the country, there have been overlapping and often contradictory regulatory frameworks of the state, providing for the setting of dubious strategies by different actors. These actors and particularly state officials, rely on a variety of institutional resources to implement, resist, or remake certain regulatory measures.
Therefore, it is imperative to understand the taxation system adopted by the country to ascertain the impact of such a system on small and large-scale businesses. South Sudan’s tax system is based on the principle of self-assessment. Taxpayers are expected to voluntarily comply with the tax laws and determine their tax obligation based on the proper application of the law and implementing regulations. Taxpayers assess themselves and submit a return to the tax administration at the required time for filing and payment. The tax administration not only assesses the taxpayer but will also review returns received for accuracy and correctness.
In addition, the tax administration does have the authority to investigate any return that it believes may be inaccurate. In such situations, the tax administration does have the authority to assess any additional tax that is determined to be due. Paying taxes is a citizen’s obligation and is how citizens and businesses can contribute to the growth and well-being of the country. The government requires sufficient revenues to be able to meet the social and physical needs of its citizens. Taxes help in the financing of government initiatives such as infrastructural services such as good roads, schools, health care, clean water, and improved communication abilities.
Everyone needs to shoulder their fair share of the burden, and when they do, the burden becomes less for each. The country has a devolved system of government in which three layers of government include national, state, and local, with the authority to raise revenue to meet their budgetary requirements.
Taxpayers in any democratic society have several basic rights that must be informed of and assisted in order for them to pay no more than the correct amount of tax, as well as obligations to their government and its agencies. There is a set of behavioural norms expected of taxpayers by the government. These expected behaviours are so fundamental to the successful operation of taxation systems, which are legal requirements in many, if not most, countries. Without this balance of taxpayers’ rights and obligations, taxation systems could not function effectively and efficiently. The Taxation Act is a comprehensive law intended to meet the needs of a developing country, such as ours, that includes all taxes and administrative procedures in one body of law.
It is designed to be fair and to keep rates low. Hence, it is based on principles such as low rates making food, goods, and services more affordable. The low rates encourage people to open businesses, provide more choices for people, and increase investment in the country, which results from being investor-friendly and rapid business expense recapture through a very friendly depreciation scheme.
The following are the discrepancies in the taxation law: The double taxation of the personal income tax by the national and state governments and the subsequent taxing of a business profit tax thrice in the states. The primary objective of taxation is to raise revenue to meet huge public expenditures. Taxation is used as an instrument of economic policy that affects the total volume of production, consumption, investment, choice of industrial location and techniques, the balance of payments, and the distribution of income.
The economic development of any country is largely conditioned by the growth of capital formation. To overcome the scarcity of capital, the government mobilise resources so that a rapid accumulation of capital takes place, which is done through proper tax planning. For instance, the ratio of savings to national income can be raised. Another secondary objective is the creation of employment opportunities (full employment) by cutting down on the rate of taxes.
Therefore, disposable income will rise and demand goods and services will rise. Increased demand will stimulate investment, leading to a rise in income and employment through the multiplier mechanism. Thirdly, taxation can be used to ensure price stability, which is regarded as an effective means of controlling inflation. By raising the rate of direct taxes, private spending can be controlled. Naturally, the pressure on the commodity market is reduced, and the cyclical fluctuation of taxes is tamed both in the period of boom and depression.
The rise in commodity prices in the country is attributed to the multiple taxes levied by different government agencies that collect taxes from citizens and businesses. It is incumbent upon this administration to review the national taxation law and issue a policy document on the administration of taxes by all levels of government, thus reducing the excessive burden of paying unreasonable taxes levied on the citizens. It is the prerogative of the legislating bodies of both the National and State Assemblies to review and realign their taxation laws to avoid incompatibility between the two laws.
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