Fiscal Transparency and Open Budget (SL0015)
Action Plan: Sierra Leone National Action Plan 2016-2018
Action Plan Cycle: 2016
Lead Institution: Ministry of Finance and Economic Development
Support Institution(s): Ministry of Finance and Economic Development National Revenue Authority Anti-Corruption Commission International Budget Partnership; Transparency International, Citizen Budget Watch, Budget Advocacy Network
Policy AreasE-Government, Fiscal Transparency, Open Data, Public Participation
Status quo or problem/ issue to be addressed
If you want to fight poverty, you need to care about budgets. They are the government’s most powerful tool to meet the needs and priorities of a country and its people. Public budgets are the blueprints on how the government will raise and spend the public funds needed for the policies and programs that will translate its priorities into action. There is no feedback mechanism from the budget discussion process to know the extent to which citizen inputs are incorporated or not in the budget, and improvements must be made in communicating the budget statements and other related information through accessible media.
Tax exemption granted by the government are a major reason for Sierra Leone’s low tax revenues. Some of the tax exemptions granted are not utilized for the purpose they are granted and as such the country loses twice. Information around tax exemption is not published which would have helped citizens to monitor the use of these exemptions.
To make budget data (Pre-budget statement and Mid-year report), Parliament audit committee reports and tax exemptions publicly available and increase citizen participation in the budget process.
Brief Description of Commitment (140 character limit)
This commitment is geared towards the government publishing the pre-budget and mid review budget and also publish all tax exemptions in an open data format. In addition it will provide feedback mechanism to citizens on their inputs into the budget.
IRM Midterm Status Summary
This commitment is geared towards the government publishing the pre-budget and mid review budget and also publish all tax exemptions in an open data format. In addition, it will provide feedback mechanism to citizens on their inputs into the budget.
Milestones: Publish, in a timely manner, the budget reports each budget year: the MTEF and a mid-year review as these two reports are still not yet published by the Government of Sierra Leone. ( Pre- budget for 2017 and 2018 and mid-year review budget for 2016, 2017 and 2018); In line with the Public Financial Management Act 2016, publish all tax exemptions, on a half yearly basis starting 2016 in government website; Publish Budget data (a pre-budget statement; the executive’s budget proposal; the enacted budget; a citizens budget; in-year reports on revenues collected, expenditures made and debt incurred; a mid-year review; year-end report; and audit reports) online, in machine-readable formats; Provide and publish the detailed feedback on how public perceptions have been captured and taken into account on the budget discussion process during the formation stage.
Responsible institution: Ministry of Finance and Economic Development
Supporting institution(s): National Revenue Authority, Anti-Corruption Commission, International Budget Partnership, Transparency International, Citizen Budget Watch, Budget Advocacy Network
Start date: July 2016 End date: June 2018
Context and Objectives
In 2014, the Ministry of Finance and Economic Development published a three-year public financial management strategy to support a stable economic infrastructure.[Note78: Sierra Leone PFM Reform Strategy 2014-2017 https://psru.gov.sl/sites/default/files/Sierra%20Leone%20PFM%20Reform%20Strategy%202014-2017_0.pdf] It outlined specific efforts such as enhancing the regulatory framework, improving accounting and promoting public transparency for all budgets. Civil society stakeholders say that the lack of regular information on budget implementation makes it difficult for citizens to demand accountability for cost-over-runs, under-funding, or expenditure not budgeted for.[Note79: Contributions by the representatives of Citizens Budget Watch and Campaign for Good Governance at the stakeholder meeting of 20 October 2017; and IRM researcher’s interview of the Executive Director of Open Budget Initiative, 28 November 2017.] A particular area of concern for the public has been transparency around tax exemptions. The significant number of tax exemptions given by the government to attract foreign investment has led to some international criticism, claiming that this negatively impacts funding for government services.[Note80: Losing Out, http://curtisresearch.org/wp-content/uploads/Losing-Out.-Final-report.-April-2014.pdf] Two key international reports between 2011 and 2014 highlighted the massive revenue loss that resulted from the system of discretionary tax waivers that have been granted without Parliament’s formal approval.[Note81: 'Sierra Leone’s Massive Revenue Loss from tax incentives', curtisresearch.org/wp-content/uploads/LosingOut-Final-report-April-2014; and 'Not Sharing the Loot, https://resourcegovernance.org/sites/default/files/Not_Sharing_the_Loot.pdf] In 2015, the Open Budget Survey reported that specific areas of improvement around the budget include publishing a pre-budget statement and mid-year review report, which are currently limited to internal use only. Currently there is an end-of-year budget report that is made available to the public, but is not accessible online.[Note82: Open Budget Survey 2015, https://www.internationalbudget.org/wp-content/uploads/OBS2015-CS-Sierra-Leone-English.pdf]
This commitment promotes further budget transparency by identifying activities in line with the Public Financial Management Act of 2016, which outlined specific institutional responsibility to provide fiscal transparency.[Note83: The Public Financial Management Act, http://www.parliament.gov.sl/dnn5/LinkClick.aspx?fileticket=CcK9MzbLTOY%3D&tabid=79&mid=650, page 25. ] This commitment goes beyond the existing year end and audit reports to expand access to information further through pre-budget and mid-term reports. It also includes the publishing of government tax exemptions as well as sharing public feedback. The activity related to tax exemptions would be transformative given the fact that the government has never published this data before and it would provide transparency on an issue that has been controversial. When implemented fully, the overall commitment would have a transformative impact as it would disclose important budget information, ideally leading to better allocation of public monies.
There has been limited progress made on this commitment. The pre-budget statement has not been published online. The researcher’s investigations show that government practice regarding disclosure of the pre-budget statement, and mid-year budget review has not changed with the exception of the citizens’ budget. In the course of the period under review, the government did produce and distribute the 2016 Citizens’ Budget.[Note84: http://opendatasl.gov.sl/sites/default/files/2016_Citizens_Budget.pdf] According to the OGP Coordinator, the Ministry still plans to publish the pre-budget statement and mid-year budget review online.[Note85: IRM researcher’s interview of the OGP Coordinator, 11 December 2017.]
There has been no information published about tax exemptions.[Note86: Budget Speech, point 76 (iii) at mofed.gov.sl/media/attachments/2017/11/09/2018-budget-speech.pdf] Civil society experts working on budget issues note that they have never seen any report from government showing tax waivers granted by government.[Note87: IRM researcher’s interview of the Executive Director of Open Budget Initiative, 28 November 2017; and participants’ comments at the stakeholder meeting of 20 October 2017.] There has also not been any movement on publishing information on how citizens’ feedback is incorporated into the national budget. As confirmed by civil society organisations involved with budget issues, it has been a yearly practice by the Ministry of Finance to hold public sessions to consult with the public as part of the budget formulation process.[Note88: Participants’ comments at the stakeholder meeting of 20 October, and IRM researcher’s interview of the Executive Director of Open Budget Initiative, 28 November 2017.] Civil society organisations participated in the 2017-2019 medium term expenditure framework budgeting process, but the Ministry of Finance did not publish any information on how they incorporated citizens’ feedback. Stakeholders interviewed, including the OGP coordinator, could not confirm whether there were still plans to publish citizen feedback.
Given the importance of this commitment, the IRM researcher recommends to carry it over to the next action plan, if foreseen activities are not implemented by the end of the current action plan cycle.
Given the large issues relating to tax exemptions, the government may consider pursuing this as a separate and independent commitment.
Sierra Leone's Commitments
SL0012, 2016, Capacity Building
Foriegn Aid Transparency
SL0013, 2016, Aid
SL0014, 2016, Capacity Building
Fiscal Transparency and Open Budget
SL0015, 2016, E-Government
SL0016, 2016, Audits and Controls
SL0017, 2016, Capacity Building
SL0018, 2016, E-Government
Record Archive Management
SL0019, 2016, E-Government
Access to Justice
SL0020, 2016, Capacity Building
Open Public Procurement Contracting
SL0021, 2016, Anti-Corruption Institutions
Publish and Revise 70% of Mining and Agricultural Lease Agreements and Contracts
SL0009, 2014, E-Government
Right to Access Information Law
SL0010, 2014, Capacity Building
Open Data Portal for Transparency in Fiscal and Extractive Transactions
SL0011, 2014, E-Government
Public Integrity Pact with 5 Ministries, Departments, and Agencies
SL0001, 2014, Conflicts of Interest
Archives and Records Management Act
SL0002, 2014, E-Government
Scale Up Performance Management and Service Delivery Directorate
SL0003, 2014, Public Participation
Compliance with Audit Measures
SL0004, 2014, Audits and Controls
Single Treasure Account
SL0005, 2014, Extractive Industries
Extractive Industry Revenue Act
SL0006, 2014, Extractive Industries
Scaling Up Extractive Industry Transparency Initiatives
SL0007, 2014, Extractive Industries
Local Content Policy (LCP) Linkages with MDAs
SL0008, 2014, Capacity Building