WFP helps South Sudan enforce transparency and accountability with fuel imports
Press Statement
The World Food Programme in South Sudan is supporting the Transitional Government in its efforts to regulate fuel imports purchased by private firms by establishing a presence for the National Revenue Authority (NRA) in neighbouring Kenya to enforce taxes and levies on the quantities of petroleum entering the country.
A nation rich in crude oil, South Sudan imports fuel and other petroleum products from Kenya’s Eldoret region, where commercially owned tankers are loaded for transit at the Kenya Pipeline Eldoret Depot and delivered across the borders to various destinations in South Sudan.
To access fuel imports needed to run its food and nutrition assistance operations across the country, WFP contracts private commercial petroleum companies to make fuel purchases in Kenya on its behalf. South Sudan is a member of the East African Community (EAC), a taxation treaty that unifies the countries in the region under a joint revenue system. As an incentive, the treaty exempts WFP from taxation for fuel purchased for humanitarian use, while taxing fuel imports for all other purposes.
But without a robust and efficient monitoring and tracking system for fuel consumption, some private firms in the world’s youngest nation have been evading tax on fuel imported for commercial consumption by wrongfully declaring all their purchases are on behalf of humanitarian organisations. These firms then sell the fuel on the parallel or informal market for profit.
To counter this malpractice, WFP supported the country’s NRA by funding a capacity-building mission for NRA delegates to the Kenya Revenue Authority during which NRA delegates were trained by their Kenyan counterparts in customs processing procedures and best practices.
The mission resulted in an agreement to establish a monitoring office in the Eldoret region to monitor petroleum products and their transport into South Sudan as well as track the payment of duties and collection of revenues at the border. The goal is to assess the fuel requirements of humanitarian projects in South Sudan so that companies attempting to claim higher amounts for tax exemption are identified.
“This is a good initiative by WFP to protect the humanitarian community and humanitarian operations. It supports the government of South Sudan in its efforts to strengthen its regulatory authority and shows the cooperation between UN agencies and the government with the shared goal of helping the people of South Sudan,” said Buol Jacob Ajak Kuany, a government liaison officer who helped coordinate the visit of the NRA delegation to Kenya.
“Ensuring that much needed tax revenues are duly collected is vital for enabling good governance,” said Matthew Hollingworth, Representative and Country Director of WFP in South Sudan. “WFP is pleased to be supporting this concrete step towards development.”
