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South Sudan raises taxes to fill gap in finances

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June 8, 2012 (JUBA) - South Sudan said Friday it was increasing taxes and customs duties, apparently in an attempt to fill the gap in the country’s budget deficit after the closure of the oil production earlier this year.

A man from South Sudan displays new currency notes outside the Central Bank of South Sudan in Juba July 18, 2011. (Reuters)Landlocked South Sudan stopped exporting its 350,000 barrels a day of oil through Sudan accusing Khartoum of stealing southern crude worth $85 million. Sudan contends that it took the oil as payment for unpaid transit fees.

The economies of both countries have been severely affected by the stoppage. South Sudan has responded by introducing wide ranging austerity measures and by trying to expand its non-oil income up from the 2% it stood at the start of the year.

Salvatore Garang Mabiordit, Under Secretary in the Ministry of Finance and Economic Planning said on Friday that the government had "introduced clear and restrictive measures to control public expending."

He said that financial forms had been provided to all public institutions "not only for administrative purpose but to ensure that public funds are used in an accordance with the financial rules and regulations compatible to the international law”.

South Sudan has struggled to address the issue of corruption since it gained self rule in 2005. This week President Salva Kiir admitted in letters asking senior officials to return stolen funds that over $4 billion was unaccounted for.

Mabiordit lauded council decision endorsing the tax increases on items such as on alcoholic drinks and cigarettes and introduction of customs duties for some luxury goods.

South Sudan’s Council of Ministers have also temporarily stopped importing government cars and re-arranged national priorities, Mabiordit said.

"At the moment, security, development of physical infrastructure, agriculture, health and consolidating peace remains some of the issues drawing attention”, he said.

South Sudan officially became an independent from the neighbouring Sudan in July last year with the hope that independence would bring peace and stability. However, the last 11 months have brought many difficulties to the young country in terms of relations with Khartoum and internally.

Despite having six years of a peace deal to resolve a number of issues South Sudan seceded without the status of contested areas determined or the north-south border demarcated.

As a consequence of the oil shut down South Sudan’s economy is on the verge of collapse, according to leaked World Bank documents published by Sudan Tribune.

Many business groups complained of experiencing difficulties getting hard hold of hard currency, particularly dollars, they need to import goods South Sudan is dependent on from neighbouring countries like Uganda, Kenya, Ethiopia, Central Africa Republic, and DR Congo.

South Sudan’s Consumer Index put together by the National Bureau of Statistics shows that food prices have increased by 80% in the last three months.

Mabiordit praised the government’s efforts to stabilise the economy, which include clamping down on the practice of exchanging hard currency sent through remittances from abroad on the black market.

In May $1 bought 4.5 South Sudan Pounds (SSP) on the black market, compared to SSP 3.7 at the official forex bureau’s.

The government, Mabiordit said, is planning to encourage the South Sudanese Diaspora to transfer hard currency to the their families to increase the amount of hard currency in circulation.

The official also said that UN agencies and international organisations are being encouraged to pay their staff in dollars. "The ministry of labour, public service and human resource development has sent out circular to all of them”, he explained.

(ST)

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  • 9 June 2012 07:43, by Hardball

    The figure shown in the article is inaccurate; the stolen oil estimate in dollar amount as $ 850 million! It’s very clever of them to drop a zero and called $ 85 million.

    This is one of the reasons why we can’t get an agreement, the problem is trust, if you can’t trust your business partners; you cannot do business with them. Sudan doesn’t get this trust issue.

    repondre message

    • 9 June 2012 08:04, by SEE ME

      Hardball

      Pls don’t put your nose in oil engineering industry.

      Ask your southerners to send some open minded to USA and get all the technical and commericial cost of the transportation with:

      > buried and above grade pipelines of crude oil
      > and buried and above grade pipelines for other finished products

      repondre message

      • 9 June 2012 08:23, by Ayuiu Makuac Lam

        SEE ME

        demarcation is comingup very soon what will you do?
        all oilrich points will belong to the south. let wait some fews days coming no one will tell to easch other my Dear.

        repondre message

        • 9 June 2012 08:32, by SEE ME

          Ayuiu Makuac Lam

          Based on my expeience in oil and gas and from USA. DARFUR is richer in oil than SOUTH SUDAN.

          All my informations are not SUDAN or CHINA.
          Are from first experts in the world the USA.

          I asked this quetion many times:

          Why the GOS concentrated in SOUTH SUDAN?

          repondre message

          • 10 June 2012 10:55, by TwicMayardit

            See Me,
            You said you have ’experience in oil and from USA’ what university or college or where about in the USA did exactly you obtained such experience?

            repondre message

  • 9 June 2012 08:10, by Ayuiu Makuac Lam

    Is good to rise taxes but corruption is event rise on this money.
    NoOne among ministers and taxes collector will remembered what Arab is doing against the south sudan. These group will put this money in his or her pocket.

    repondre message

    • 10 June 2012 09:05, by Alier42

      I totally disagreed with the i dea of increasment of taxes ,it won,t make sense or help at all.the first think the goverment of the day need to do,is to fight the level corruption within it rank and bring back the money in foreign account and sack the goverment officials who are solely responsible for stolen.,or otherwise,people have lost faith in splm,especially the way splm is running country re

      repondre message

  • 9 June 2012 09:31, by solider

    if they returned the 4 billions they know it will go to mr. kiir pocket , they will never make the mistake of returning the money and watch it go to kiir or another new weak thieves

    repondre message

    • 9 June 2012 09:54, by pabaak

      Now this is a moment that South Sudan will learn good-financial management, because you have constrained budget that need careful management and that ’s how you’re going to learn what are your priorities. I think if we follow through then after this austerity measures we will be fine. There are more areas to find new revenues including but limited to such as tourism,others minerals such as gold,et

      repondre message

      • 9 June 2012 09:59, by SEE ME

        pabaak

        Iam narrating FACTs and repeating wisdoms to those who choosed the INHUMANE and OBSCENE language and discarded all about the Holy BIBLE.

        Even the white USA christians are upset with your OBSCENE lannuage when I told them that SOUTHERN SUDANESE called themselves the true CHRISTIANS.

        I resend all your OBSCENE lang. to many as cc:

        repondre message

  • 9 June 2012 10:42, by Waucity

    Actually, the financial situation is quiet Sad in Southern Sudan, our slow leaders failed to think of plain B of exporting oil to the rest of the world.Now they are desperate, I always say don’t relay on White people,they will not help you much..I believe South Korean company offered to build pipeline years ago,why didn’t you take the deal.Now you will go back to Khartoum and they will now ask 85%

    repondre message

  • 9 June 2012 20:04, by Eastern

    As I have been always telling, cattle camp leaders cannot manage national economics! We are headed for dooms country!

    repondre message

    • 9 June 2012 21:10, by Mabior

      Eastern
      Am afraid cattle camp leaders will have to manage our economy since they fought for our independence.where were you the non-cattle camp leader during our long struggle for independence in the bush?You were no where so let us please manage the creation of cattle camp leaders because they really deserve to manage it since they brought this dream to tangibility.

      repondre message

      • 10 June 2012 09:04, by Eastern

        Mabior, this is exactly the arrogance I have always been talking about. If the ’liberators’ have their new creation in mind, they would involve those in the know of running a country to advise them on the same. The cattle cam leaders are really messing up the whole country!!! I am fed up!!!

        repondre message

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