Improving Revenue Collections through Tax Reforms: Evidence from National Revenue Authority, Sierra Leone

The National Revenue Authority (NRA) is a semi-autonomous government revenue authority established by an act of Parliament on 13 September 2002. Operations commenced the following year, in 2003. With the goal of increasing domestic revenue collection and decreasing donor dependence, its primary mandate is to assess and collect tax revenues on behalf of the Government of Sierra Leone (GoSL). Revenue collections are a key instrument for the Government of Sierra Leone in achieving its ambitions for poverty reduction, increasing financial independence, and achieving middle-income status. The study examined the improvement in revenue collections through tax reforms. The objectives of the study were to identify the main tax reforms in the country, assess the impact of tax reforms on revenue generation, and determine the extent to which tax reforms impact Gross Domestic Product (GDP). Data were sourced from the Monitoring, Research, and Planning Department of the NRA and extracted through the desk survey method, review of available records, and review of the related literature. Data were analysed by means of tables and bar graphs. The finding revealed that tax reforms still have a significant level of weaknesses and compromises, Sierra Leone is faced with both tax reform policies and revenue administration challenges, like most African countries. Sierra Leone has a narrow tax base which reduces potential revenues and makes the country more dependent than it could be on a small section of society. Broadening the tax base is a key challenge to mitigate this problem. Furthermore, the country is challenged by the growing informal sector making taxation in this sector difficult. It was recommended that for successful tax reform, there should be an interactive forum between the government and taxpayers as a means of finding a common precise, and definite in its definition of what is obtainable and what is not. It was also recommended on the expedition of the automation process of Sierra Leone’s tax system to enable the majority of Sierra Leoneans to access information about the tax system which will deter corruption, and improve effectiveness and efficiency in tax administration incidental to improve tax collections by generating sustainable revenue.