As DFS becomes more mainstream, government revenue collection has emerged as a new frontier in Sierra Leone. Here, the informal economy represents a whopping 53 percent of GDP. And at least $23 million from the cash economy is being digitized at mobile money agents, representing only a tip of the iceberg. Meanwhile, the tax to GDP ratio in Sierra Leone is at a low of 12.6 percent of GDP compared to the regional Africa average of 18 percent in 2017.

Sierra Leone’s economy is on the rise, and digital financial services can help ensure this growth is also reflected in our domestic revenue. For example, in Tanzania, digitizing tax payments has the potential to increase annual revenue by almost $500 million per year. Countries are increasingly designing secure tax payment platforms that link directly to citizens’ digital accounts, which allows for real-time monitoring of revenue collection and provides system checks and audit trails.

We share key insights from the recent Better Than Cash Alliance’s Peer Exchange in Rwanda that we believe will help us seize the power of digital payments to improve Sierra Leone’s revenue administration efficiency, expand the tax base, and connect people to government (P2G) tax and service payments.

Most importantly, the peer exchange reinforced for us the positive ripple effect of digital payments. Along with increasing overall tax revenue, digitizing individual and corporate tax payments can lower transaction costs for both the government and taxpayers, increase government transparency, reduce fraud and corruption, and improve the overall efficiency of a country’s tax system.

As a member of the Better Than Cash Alliance, Sierra Leone has made the commitment to embrace digitization, invest in revenue collection infrastructure, and to create an enabling environment for DFS innovation to achieve these goals. Following the peer exchange, the National Revenue Authority (NRA) has been formally invited to join the Digital Financial Services Working Group, which now includes new stakeholders such as the National Registration Secretariat for National ID that are critical to developing the architecture required to harness the potential of digitization. Using insights from the RRA’s experience, Sierra Leone is working to implement digital payment systems for taxes, with a focus on streamlining the payment process for SMEs. And in the upcoming year, the NRA will introduce an Integrated Tax Administration System (ITAS) which makes provision for various forms of payments solutions.

Under President Julius Maada Bio’s new administration, domestic revenue collection remains a top priority in Sierra Leone, as it helps fund the government’s free education initiative and investments in key sectors such as agriculture and health. We are confident that our country’s growing digital financial inclusion, coupled with lessons learned at the peer exchange and our commitments moving forward, will help Sierra Leone seize the revenue collection opportunities that lie before us and ultimately serve citizens more effectively and efficiently.

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