South Sudan is struggling with a significant fiscal
challenge: the government urgently needs a more dependable source of domestic
revenue to fund public services, infrastructure, and development, all while
minimizing its reliance on the unpredictable nature of oil income.
This isn’t just about ramping up tax collection; it’s about
creating a revenue system that is reliable, transparent, and efficient. Such a
system would encourage compliance, cut down on leakages, and instil confidence
in citizens that public funds are being managed responsibly.
According to the World Bank's 2026 Public Finance Review,
South Sudan faces major fiscal hurdles, including weak non-oil revenue
performance, a heavy reliance on oil, and governance issues.
1. Reduce Dependence on Oil
Oil is still the backbone of South Sudan's public finances,
which poses a significant risk. Disruptions in oil production, price
fluctuations, and export route issues can create major vulnerabilities. The IMF
has pointed out that this dependence on oil brings considerable fiscal risks,
emphasizing the need to boost non-oil revenue to establish a more stable fiscal
environment. The government should prioritize mobilizing non-oil revenue as a
long-term national goal, rather than just a stopgap when oil revenues dip.
Potential sources for this revenue could include:
• Income and business taxes
• Customs duties
• Property-related revenues
• Business registration fees
• Licensing fees
• Selected excise taxes
• Revenues from natural resources outside of petroleum
• Activities in the digital and financial sectors
The aim should be to expand the tax base instead of
continually increasing the burden on the same small group of taxpayers.
2. Bring More Businesses into the Formal Economy
A large informal economy makes it tough for the government
to track who’s running businesses and what economic activities are happening.
South Sudan could tackle this by simplifying and making business registration
more affordable, while also strengthening the connections between business
registration, tax identification, and licensing systems.
A small business shouldn’t have to jump through hoops just
to meet compliance standards. At the same time, businesses that consistently
sidestep their legal responsibilities should face clear and consistent
enforcement. The idea is simple: let’s make compliance a breeze and make
evasion a tough road to travel.
3. Modernize Tax and Customs Administration
When government systems go digital, connected, and
audit-able, revenue collection becomes a whole lot more effective. The IMF has
pointed out that South Sudan could really benefit from improvements in areas
like taxpayer registration, audits, customs operations, large taxpayer
management, and information technology. Digital systems can help cut down on
manual errors and make tracking payments a lot easier.
South Sudan should gradually roll out:
• Electronic
tax filing
• Digital
payment systems
• Electronic
receipts
• Taxpayer
databases
• Customs
automation
• Cargo
tracking
• Digital
business registration
• Data-sharing
between relevant government agencies
These changes can also help minimize the amount of cash that
individual officials handle.
4. Strengthen Customs Collection
Customs play a crucial role for a landlocked country that
depends heavily on imports. The government needs to tighten controls at major
border crossings and enhance the valuation and tracking of imported goods. The
IMF has previously suggested measures like customs valuation reforms, cargo
tracking, and stricter compliance controls. The aim shouldn’t just be to
squeeze more money from traders; it should be about creating a system where
legitimate businesses understand what they owe, why they owe it, and how to pay
it. When businesses know what to expect, they’re more likely to comply.
5. Close Revenue Leakages
Raising tax rates won’t fix the issue if a significant
amount of revenue is slipping through the cracks due to weak controls,
exemptions, under-declaration, corruption, or poor administration. The
government should regularly audit revenue collection agencies and make
performance information available to the public.
Revenue should be traceable through the following channels:
from the taxpayer to the collection system, then to the treasury, and finally
to the national budget. When public officials are tasked with collecting
revenue, it’s crucial that there’s clear accountability for any missing or
unaccounted funds.
6. Review Tax Exemptions
Tax exemptions can sometimes play a vital role in supporting
economic or humanitarian efforts. However, if they become excessive or poorly
monitored, they can significantly cut into government revenue. To address this,
the government should keep a transparent register of major exemptions and
regularly assess whether they still fulfill their intended purpose. This
process needs to be handled with care. Humanitarian organizations and essential
public-interest activities shouldn’t be weighed down by inappropriate taxes
just to boost revenue. The IMF has also warned against eliminating exemptions
for humanitarian goods. (IMF eLibrary)
7. Improve Revenue Collection at State and Local Levels
Revenue collection shouldn’t be solely focused in Juba.
State and local governments also require effective systems to gather legitimate
local revenues. However, decentralizing collection must come with clear
guidelines. Citizens and businesses shouldn’t have to deal with multiple
overlapping charges from different government levels for the same service. A
single, transparent schedule of authorized fees and taxes could help clear up
confusion and reduce the chances of unofficial collections.
8. Make Taxpayers See the Benefit
People are more inclined to accept taxes when they can see
how their contributions translate into public services. If citizens are paying
taxes but notice little improvement in roads, schools, healthcare, water, or
security, their trust in the tax system can diminish. Therefore, revenue
mobilization should be linked to better public financial management. The World
Bank's 2026 review suggests enhancing transparency in oil revenue management,
publishing budget execution reports, and improving fiscal management. (World
Bank) Collecting and managing revenue should be viewed as two interconnected
aspects of the same process.
The establishment of the South Sudan Institute of Revenue
Administration and the rollout of the second phase of the Non-Oil Revenue
Mobilisation and Accountability Project in 2025 mark a significant step towards
enhancing revenue management and accountability. (African Development Bank)
However, these investments need to be backed by robust
professional standards and measures to prevent conflicts of interest.
11. Foster Economic Growth Instead of Just Increasing Taxes
There's only so much extra revenue that can be squeezed from
a small economy.
One of the most effective ways to boost government revenue
over time is to focus on growing the economy itself. This involves supporting
sectors like:
• Agriculture
• Livestock
• Small and medium-sized enterprises
• Manufacturing
• Construction
• Telecommunications
• Financial services
• Tourism
• Trade
A more substantial formal economy means a broader tax base.
The World Bank has also highlighted the importance of enhancing non-oil
revenues while promoting economic diversification and private-sector growth.
(World Bank)
A Practical Revenue Reform Agenda
South Sudan could structure its revenue reforms around five
key priorities:
| Priority | Action |
|---|---|
| Digitalisation | Move tax, customs and payment systems online |
| Compliance | Improve registration, audits and taxpayer services |
| Transparency | Publish revenue and budget information |
| Diversification | Expand legitimate non-oil revenue sources |
| Accountability | Reduce leakages and strengthen oversight |
The Bigger Question
South Sudan doesn’t necessarily need a complex tax system;
what it really needs is a credible one. A solid revenue system should make it
easy for honest taxpayers to comply, tough for revenue to slip away, and clear
for citizens to see how public funds are being utilized. The country has
already started rolling out reforms in revenue administration, and the official
fiscal data shows that non-oil revenues are becoming a more significant part of
the government’s income. For instance, South Sudan's FY2024/25 execution report
noted that tax and non-tax revenue accounted for about 46% of total revenue
performance, even though oil remains the largest single source. (mofp.gov.ss)
The real challenge now is to ensure these gains are sustainable. South Sudan's
long-term fiscal health will hinge not just on oil production, but also on its
ability to establish institutions that can collect and manage domestic revenue
in a fair and transparent manner.
Conclusion
Enhancing revenue collection shouldn’t just mean increasing
taxes. It should focus on collecting what is rightfully owed, minimizing
leakages, broadening the economic base, modernizing administration, and proving
that public revenue is being managed responsibly. If South Sudan can hit these
targets, domestic revenue could become a more solid foundation for government
services and national development. Ultimately, the true measure of revenue
reform isn’t just about how much money the government brings in; it’s about
whether the system can collect it in a fair, transparent, and sustainable way.
BLESSED Abraham Policy Desk
This article is an independent analysis of policy matters. It’s important to note that the views expressed here do not reflect the official stance of the Government of South Sudan or any political group. The recommendations put forth are meant to spark public discussion and are grounded in publicly accessible institutional and economic analysis.
