Statistics indicates that most African governments are able to collect approximately 15% of their Gross Domestic Product in taxes against the 40% that is being collected by European, Asian, and North American countries
Kampala, Uganda | RONALD MUSOKE | In its effort to combat illicit financial flows but also boost revenue collection at individual state level, the African Union Commission has signed a memorandum of understanding with the African Tax Administration Forum (ATAF), a non-profit that has been working with several African countries to build efficient and effective tax administrations.
The signing of the MoU marks a significant step in strengthening the cooperation on tax policy and improving tax administration all aimed at mobilizing domestic resources in Africa and achieving Agenda 2063.
Also, the two organisations plans to work out on new strategies to combat illicit financial flows (IFFs) and bring the African voice on tax matters to global discussions.
Albert Muchanga, the Commissioner for Economic Development, Trade, Industry and Mining at the African Union Commission signed the MoU on behalf of the AU while Logan Wort, the Executive Secretary of ATAF, signed on behalf of his organization during the second meeting of the Specialised Technical Committee (STC) on Finance, Monetary Affairs, Economic Planning & Integration Subcommittee on Tax at the AU Headquarters in Addis Ababa on May 31.
The Addis Ababa meeting brought together dozens of experts from Ministries of Finance and tax administrations under the Specialised Technical Committee on Monetary Affairs, Finance, Planning and Integration of the African Union.
The meeting also provided experts from the continent the opportunity to input into issues such as domestic minimum top-up tax, cross-border VAT and e-commerce, and the United Nations Resolution on a Convention for International Tax Cooperation.
Available statistics indicates that most African governments are able to collect approximately 15% of their Gross Domestic Product in taxes against the 40% that is being collected by European, Asian, and North American countries.
However, given the massive demands of developing African countries, this low level of tax collection is seen to jeopardises the African continent’s socio-economic developmental progress.
“I am delighted that we will be in a position to continue the work of combatting IFFs, increasing revenue collection for achieving Agenda 2063 and building effective revenue systems across the continent,” Wort said.
He added: “This is a momentous occasion in bringing tax issues to a political level while providing practical solutions tailored for African countries.”
Amb. Muchanga noted that the objectives of revenue mobilization on the continent would be realized with a coordinated effort.
Going forward, the ATAF and the African Union Commission will be convening a meeting to discuss the going global tax discussions to inform and update Member States on the evolution of the UN Tax Convention and the upcoming OECD Inclusive Framework Meeting in July 2023.
Meanwhile, on May 25, the ATAF in collaboration with the Juta and Company Ltd launched the latest journal of the African Multidisciplinary Tax Journal (AMTJ) in Pretoria, South Africa.
The annual, double-blind peer-reviewed journal showcases exceptional research papers spanning the entire spectrum of taxation research.
With a distinctive focus on Africa, the AMTJ aims at being the source of original, evidence based and policy relevant multidisciplinary research in all areas of taxation. The AMTJ also bridges the gap between academic researchers, policymakers, and tax practitioners across the continent. It serves as a reference point for researchers, government officials, and policymakers and influencers working on taxation in Africa.
The AMTJ is the brainchild of the African Tax Research Network (ATRN) annual Congress. It accepts papers presented at the congress, as well as those that were not presented but focus on taxation. The network encourages submissions of research papers utilizing various research methods, including theoretical, analytical, empirical, experimental, and field studies in all areas of taxation.
Volume 3 of the AMTJ comprises 16 papers, including 12 in English and 4 in French. These papers explore diverse aspects of taxation, providing valuable insights and practical recommendations relevant to the African tax system.
The issues focus on; the impact of the AfCFTA on customs revenue, what drives tax compliance in sole traders, how aid granted during conflicts affect revenue mobilization, whether the increase in royalty tax rates reduce under reporting in the mining sector, how effective technology is increasing tax compliance and whether a tax dispute court could help with timely resolution of commercial tax disputes in the AfCFTA.
“Volume 3 of the African Multidisciplinary Tax Journal represents an important milestone in our ongoing efforts to advance tax research and practice in Africa,” said Caroline Mutayabarwa, the Manager of ATAF Tax Academy at ATAF.
“These papers offer invaluable insights and recommendations that can contribute to the development and improvement of the African tax landscape. We invite researchers, policymakers, and tax practitioners to engage with this volume and contribute their own research for future editions.”