• Weak tax enforcement cuts South Sudan oil revenues
• Oil provides 90% of government income
• Economy contracts 30% in 2025 amid export disruptions

Weak enforcement of tax laws is reducing government revenue from the oil sector, a South Sudanese finance ministry official said.

Benjamin Ayali Koyongwa, undersecretary for planning at the Ministry of Finance, said on Friday, Feb. 6, that inconsistent enforcement of tax laws costs the country "millions of dollars" each year. Some tax provisions are not applied consistently, he said. He did not provide specific figures on the scale of losses or identify which rules are affected.

Koyongwa also pointed to weaknesses in customs procedures. Some importers pay duties in local currency using exchange rates that do not reflect prevailing market levels, reducing the amounts collected by the government, he said. The official also cited limited non-oil tax collection. He said value-added tax (VAT) currently accounts for less than 1% of total public revenue.

Public Finances Under Pressure

The announcement comes as the government plans to introduce an expanded VAT regime by July 2026, amid heavy reliance on oil revenues and recurring concerns about the management of extractive income.

Oil underpins South Sudan's public finances, accounting for nearly 95% of exports and 90% of government revenue, according to the French Treasury. This heavy dependence on a single sector exposes the national budget to production swings, international price volatility and governance weaknesses.

Several international reports have highlighted shortcomings in oil revenue management. In September 2025, Ecofin Agency reported that, according to the United Nations Commission on Human Rights, more than $2.2 billion was diverted between 2021 and 2024 under the "Oil for Roads" program, which was meant to finance road construction. That finding has fueled criticism of the transparency and effectiveness of oil revenue management.

Meanwhile, non-oil revenue remains limited. Authorities acknowledge that non-oil taxation plays only a marginal role in the budget, reinforcing reliance on oil income. Broadening the tax base is emerging as a key fiscal challenge.

The World Bank has warned of a risk of near-universal poverty in the country, where, according to its 2022 estimates, 76% of the population lived below the national poverty line. South Sudan's economy has contracted for the fifth consecutive year, with GDP down 30% in 2025, according to an International Rescue Committee report published on Feb. 6, 2026. The report said oil exports, disrupted by conflict in neighboring Sudan, are causing daily losses estimated at $7 million.

Abdel-Latif Boureima