Evaluation report : increasing revenue for development; number 636-0108; Sierra Leone

Special evaluation covers the period ending 12/83 and is based on document review and staff interviews. Despite early setbacks, goals have been met and in some cases exceeded, and the project has contributed significantly in a time of economic depression to increased revenues in all areas, including the difficult area of personal taxes (which includes taxes on profits of small businesses). Particular achievements include, inter alia: (1) development of procedures manuals and of less time-consuming administrative procedures and internal forms, including procedures for the Payroll Tax and PAYE (Pay-as-you earn withholding) collection systems and procedures permitting access to other government departments, especially the Department of Customs and Excise and the Ministry of Trade; (2) valuable input into the system provided by the 10 ITD managers trained overseas and 125 others trained (in excess of targeted numbers) on-the-job; and (3) development of the rudiments of a Master File (already incorporated in two functions), an incentive awards program, an employer's kit to help answer common questions on withholding, and a taxpayer education program (now pending MOF approval). Reliable statistical and accounting data allowing evaluation of the rate of progress made under the project are still lacking, however, as are guidelines to ensure employee integrity in collecting taxes. Major constraints have included a shortage of ITD staff due to a government restriction on hiring (although measures to obviate the shortage were available); the MOF's removal of collection files from the ITD; the absence of feedback from the ITD; delays in introducing enforcement procedures, establishing an internal audit section (due in part to staff shortages), and approving the taxpayer education program; and the vacuum created by the departure of the senior technical advisor. Finding a replacement is chief among the recommendations made.