South Sudan Revenue Authority Halts Controversial Fuel Levy

The South Sudan Revenue Authority has suspended a controversial levy on petroleum imports from Kenya following widespread complaints from businesses and NGOs that the fee exacerbated economic struggles. The decision aims to alleviate financial burdens and ensure the continued supply of humanitarian aid into the country. The fee, previously implemented by Crawford Capital International Ltd, was criticized for being exploitative and contributing to rising fuel prices. The government is now committed to covering the costs of required services without additional charges to importers.

The South Sudan Revenue Authority (SSRA) has announced the suspension of the E-petroleum Accreditation Permit fee, which was imposed on petroleum imports destined for Juba from Kenya. This decision comes after considerable backlash from various stakeholders including businesses, truckers, and international non-governmental organizations (NGOs) who asserted that the levy imposed an additional financial strain on the struggling South Sudanese economy. Initiated in March 2024, the levy was met with objections as it directly contributed to increased fuel prices, which in turn jeopardized the supply of critical humanitarian aid into South Sudan. Central to this issue is the collaboration between Crawford Capital International Ltd and its local affiliate, Capital Pay Ltd, tasked with the collection of this fee at key transit points in Kenya. Critics have accused this private joint venture of exploiting importers with exorbitant fees associated with the accreditation process. In response to these concerns, the SSRA has instructed the Ministry of Information to eliminate all related charges, indicating that such fees should not burden the importers nor marketplaces. Daniel Kon Ater, the SSRA Commissioner for Corporate Services, highlighted the detrimental impact of these fees on commodity prices, stating, “The South Sudan Revenue Authority (SSRA) would like to request the removal of all charges and fees related to the Trade Accreditation Permit with immediate effect.” Furthermore, the South Sudanese government has committed to covering the associated service costs as per a prior agreement. The suspended charges included a fee of $0.03 per liter of fuel for the E-petroleum Accreditation Permit and an additional $0.024 per liter for fuel marking, significantly affecting the total cost for fuel shipments. However, despite legal challenges to the levy, a court decision in May upheld its implementation before this recent suspension. The Kenya Revenue Authority confirmed that Crawford Capital was appointed to facilitate customs procedures and related fees for fuel imports destined for Juba. There was concern regarding the potential impact on business operations, with a representative from the Kenya Pipeline Company Ltd voicing apprehension about the repercussions of added levies on business viability, stating, “I agree that any additional levies will definitely hurt the business if the uptake is impacted.”

The suspension of the E-petroleum Accreditation Permit fee highlights the ongoing economic challenges faced by South Sudan, particularly in the petroleum sector. The levy was introduced as a financial mechanism to support revenue collection related to fuel importation but was quickly met with resistance from numerous stakeholders who argued it was excessive and detrimental to the economy. Businesses, especially within the fuel and transportation sectors, are already contending with high operational costs, and the added financial burden from the permit fee was seen as counterproductive to the country’s recovery efforts. The complexities surrounding customs operations and the roles of private firms in tax collection also shed light on governance issues within the procurement of public services in South Sudan.

In summary, the SSRA’s decision to suspend the E-petroleum Accreditation Permit fee reflects the government’s acknowledgment of the adverse effects of such levies on the South Sudanese economy and the vital humanitarian efforts within the country. By eliminating these fees, South Sudan aims to alleviate financial pressures on businesses and ensure the continuous flow of essential supplies, which is critical for both economic stability and humanitarian assistance. The engagement of private firms in tax collection remains a significant aspect of this issue, emphasizing the need for transparency and fairness in government contracting processes to foster a supportive business environment.

Original Source: www.theeastafrican.co.ke