Spending Taxpayer Money to Rent Private Properties

 

Spending Taxpayer Money to Rent Private Properties:

NRA Fails to Disclose Total Amounts Spent on Office Rentals Each Year

 By Kongbap Sumner

In Sierra Leone, the National Revenue Authority (NRA) holds the responsibility of assessing and collecting domestic taxes, customs duties and other revenues, as well as administering and enforcing laws relating to these revenues. Yet, despite being a long-standing government entity (established in 2002), the NRA continues to rely predominantly on leasing private properties to serve as office space for its operations across the country – spending up to billions of Leones on rent each year.

According to section 24.1a of the NRA Act 2002, National Revenue Authority management can use up to 3% of the tax collected by the authority annually, to take care of rent and other administration costs. However, with up to 95% of properties used by the NRA being rented from private individuals – that is according to a statement made by the NRA Commissioner General, Dr. Samuel Jibao, during the Authority’s November 2020 retreat – exactly how much money is being spent each year on rental costs? And is that amount equal to more or less than 3%?

To explore these two questions, a request for information – submitted in line with the Right to Access Information (RAI) Act – was sent to the NRA Commissioner General on November 3^rd, 2020, followed by an appeal letter. To date, the authority has failed to provide a reply.

With no formal response, independent investigations – which included visiting the said offices in Freetown and taking note of the visible signboards on display – found that NRA is currently occupying a total of nine properties in the capital city, at least seven of which are privately owned. These include:

Head office – Modesty House – 7 Bathurst Street, Freetown – privately owned.

Freetown Tax District East – 12 Race Course Road, Freetown – privately owned.

Freetown Tax District Central – 29 Percival Street, Freetown – privately owned.

Freetown Tax District West – 148 Wilkinson Road, Freetown – privately owned.

Small and Medium Taxpayer Office – 17-19 Wellington Street – privately owned.

Large Taxpayers Office – 38 Wellington Street, Freetown – privately owned.

NRA New Building Wellington Street, Freetown – privately owned.

The two other properties occupied by NRA in Freetown are owned by the Sierra Leone Ports Authority, which is a government institution at Cline Town. These include:

Custom Office – Cline Town, Freetown

Customs and Excise Department Headquarter – Cline Town, Freetown

For his own part, the NRA Commissioner General, Dr. Samuel Jibao, has stated that: “The money paid as rental fees for the [above] properties and other properties NRA is occupying costs the Authority the equivalent of over a million US dollars in rent each year.”

In the regions, NRA is currently occupying four properties as regional offices, which include:

Northern region – Bombali District Office – 2 Station Road, Makeni

Eastern region – Kenema District Office – 10 Hanga Road, Kenema

Eastern region – Kono District Office – 2 Sembehun Road, Koidu

Southern region – Bo District Office – Bo Town, Bo

According to Dr. Samuel Jibao, the above four properties are also privately owned, and the NRA is paying rent to occupy each one.

“The NRA now intends to have its own property which will become the headquarter building and will cost $12, 346, 512.80 [USD],” Dr. Jibao added. “The 12-storey building will house all its departments in Freetown. The proposed land for the building is a government land donated to NRA.”

Buffy Bailor serves as President of the Institute of Accountants in Sierra Leone. He estimated that the total amount NRA has paid as rent over the past 15 years could have greatly helped cushion the economy – especially needed, since iron ore prices dropped in recent years, and gravely impacted the amount of revenue originating from the country’s mining sector.

“The institution [NRA] does not own a single building in the country,” Bailor maintains – adding that each year, the amount of rental payments paid by the NRA continues to increase. “Fifteen years ago, the NRA only rented its headquarters at Bathurst Street in Freetown – but with the demand to generate more income for government, it hired more staff, which demands additional accommodation for them. The institution is now occupying over six buildings in central Freetown, and we know how expensive rented properties are in the city.”

He also disclosed that NRA offices along the border areas of Gbalamuya and other parts of the country are in a deplorable condition.

Along the national border areas, NRA has four border posts with Kailahun – where there are seven official crossing points. The four posts are:

NRA Yenga Border Post in Yenga Koindu being its main district border post.

Bo-Waterside Border Post, Bo-Waterside, Office, Zimmi Bo District

Gbalamuya Border Post office – Kambia District

Jendema – Pujehun District

Rowland Stevens is a financial expert and analyst, formerly at the Bank of Sierra Leone. He says that looking at the number of properties currently occupied by NRA, the Authority could have been saving the equivalent of over a million US dollars annually, if they were having their own buildings.

“Government can use these huge amounts for other development projects and social services like the free quality education, health care and agriculture,” he explained.

Stevens also stated that, when the NRA gets its own building (and no longer has to pay recurring rental fees), the amount of revenue they are able to send to government as collected tax should then increase.

For his own part, Dr. Robert Moikowa, Director of Service Delivery and Performance Management at the Ministry of Development and Economic Planning, similarly stated that the monies spent by NRA on office rental can be used by government to provide so many services, as it is very huge.

“If NRA constructs its own office,” Dr. Moikowa said, “it will save not just the NRA but the country from the huge financial loss that is acquired through rentals and maintenance of the several buildings it is currently renting nationwide.”

In the request for information and appeal letters that were submitted to NRA, in line with the country’s Right to Access Information Act, the following questions were asked (though, to date, no response has been provided):

-        How much money in revenue has NRA collected in 2017, 2018, 2019 and 2020?

-        Of this total, how much did NRA withhold for its own expenses in 2017, 2018, 2019 and 2020?

-        How many rental properties is the NRA using as office spaces across the country? Please describe the type of rental, and the number of offices rented for each district.

-        How much money did NRA spend on office rentals nationwide in the same years, disaggregated by year, district and offices?

-        What are the benefits of renting offices versus buying and operating offices on NRA owned land?