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NOTICES & DOCUMENTS  

REVENUE TRANSFERRED BETWEEN TRANSIT BANKS AND THE CONSOLIDATED FUND (LAW COURTS).
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May 29, 2017, 12:08
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PRESS STATEMENT

REVENUE TRANSFERRED BETWEEN TRANSIT BANKS AND THE CONSOLIDATED FUND (LAW COURTS).


The National Revenue Authority (NRA) in July 2011 resolved to transfer the task of collecting revenue from Taxpayers to the Commercial Banks. This was a move that received support from both the Executive and the Legislative arms of government. The aim was to expedite the transfer of funds to the Consolidated Revenue Fund (CRF) and to protect the flow of Government revenue. This arrangement was sealed by the signing of Memoranda of understanding (MOUs) with thirteen Commercial Banks. So far, this objective has to a very greater extent been achieved.

 

However, since the publication of the 2015 Auditor General’s Annual Report on the Final Account of the Government of Sierra Leone, we have observed that some tabloids have used section of the Report to undermine the good work of the NRA. Most specifically, the section that relates to the transfer of revenue deposited by Taxpayers into various Transit Banks on behalf of government into the Consolidated Revenue Fund has been grossly misinterpreted. Even though issues raised in the Report have been clarified at the Public Accounts Committee (PAC) in Parliament, these tabloids still persist to report on the issue without bothering to get the reaction of the NRA or the parliamentary Public Accounts Committee which is unfortunate.

 

According to the MOUs signed with the Commercial (Transit) Banks, funds collected on behalf of the government are meant to be transferred to the Consolidated Revenue Fund (CRF) within 24 hours after collection. There is no provision to make withdrawals from these transit banks.

 

NRA ‘s role in this arrangement is to make sure that the funds paid to the Commercial Banks are transmitted to the Bank of Sierra Leone within the stipulated time period. Bank statements and other measures have been put in place to monitor the process of transfer to the CRF. And revenue reconciliations are undertaken by the NRA, the Bank of Sierra Leone, the Transit Banks and the Office of the Accountant General.

 

In this specific instance, individual Taxpayers make payments into Commercial Banks who record those payments in the relevant Tax/Revenue Accounts opened with them by the Accountant General on behalf of the government. These recordings are listed as and when payments are received by the banks. At the end of a particular working day, these transaction listing are added and the totals transferred to the CRF while details of these transactions are still held in the transit banks.

 

 

The claim that some of the funds paid into the commercial banks are not transferred to the CRF is absurd. This is because all funds paid into the transit banks are fully transmitted to the consolidated funds as mechanisms are in place to ensure this happens.

 

Given the volume of transactions generated by the banks through individual taxpayers’ lodgments, it will be ineffective to transmit funds to the CRF on a case by case basis. As a result, transfers into the Consolidated Revenue Fund do not follow the pattern seen in the Commercial Banks where individual transactions are recorded as and when the Taxpayers make payments. Instead they are done daily on aggregate basis based on tax type. Any discrepancies are corrected during the reconciliation process by the four parties stated above.


NRA does not open these accounts with the banks; they are opened by the Accountant General. These accounts are not current accounts; therefore, withdrawals cannot be made on these accounts. Only bank transfers are allowed within these accounts. So how can NRA steal (‘tiff’) monies from these transit banks?

 

The claim that funds paid to the Commercial Banks are not traceable to the Consolidated Revenue Fund is a farce and vindictive. Time and again the External Auditors have been told that transfers made to the Bank of Sierra Leone (BSL) and seen in their bank statements are aggregate transfers from transit banks and not individual transfers by transactions. And these amounts can clearly be traced and ascertained by the entries in both bank statements (Transits and BSL, where the Consolidated Revenue Funds are held). For completeness of work, these statements must be checked and ascertained before finalisation of their reports.

 

Below is an analysis of some of the major findings contained in the report.

 

1.     The Audit Report claims that on June 26th2015, Le 93,464,150 was seen in the Cash Book, and   not in the CRF. This amount was however paid in three installments two of which are direct credit to the BSL  totaling Le 91,5550,000 (Le 45,000,000 and Le 46,550,000) on 26/06/2015. The third payment of Le1, 914,150 was paid to the Sierra Leone Commercial Bank (SLBC), and the aggregate collection of that date which amounted to Le7, 075,400 was transferred to BSL on 29/06/2015. This amount is inclusive of the Le 1,914,150, and the figures are seen on the SLCB and BSL bank statements as shown in the extracts below.

2.     In another instance, the Audit Report claims that on the 18th June 2015, Le 27,600,250 was not traced to the CRF. This money was however transferred to the CRF in three installments.The first two payments of Le 24,402,800 and Le1, 880,000 were credited to BSL on 18/06/2015      and 22/06/2015 respectively. The third payment Le 1,317450 was made to SLCB on 18/06/2015. An aggregate sum of Le 3,953,250 inclusive of         this amount was transferred to BSL on 29/06/2015. Please see below extracts of the SLBC and BSL statements below.

 

3.     The Audit Report also claims that on October 21, Le 99,485,850 was not seen in the BSL bank statement. This is also not true. This amount was paid in three installments to the SLCB at different dates. The first two payments of Le 40,000,000         and Le 58,000,600 (Le 98,000,600) were made on 21/10/2015 respectively and an aggregate         amount collected of Le 99,556,600 was remitted to BSL on 26/10/2015. The final payment of Le1,485,250 was made on 28/10/2015 and an aggregate collection of Le 6,812,950 was transferred to BSL on 24/11/2015 as is shown below.

 

The evidence above clearly shows that all government revenues paid into the Transit Banks are remitted into the Consolidated Revenue Fund (CRF). It is important to note that the NRA has come a long way in embracing best practices in modern tax administration. Since the commencement of its Modernisation Programme in 2010, the Authority has implemented reforms that have improved efficiency in revenue collection and service delivery. The modernisation of revenue collection processes has enabled greater transparency and accountability of government revenue.


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