By Hlengiwe Ndlovu | 2018-05-24
TAXATION is not the nicest of subjects to talk about lately, not especially at Eswatini, with the Finance Bill of 2018 proposing an increase in over 15 duties, taxes, user fees and tolls.
However, if put to proper use, taxes can significantly reduce African countries’ heavy reliance on aid for development.
Resource mobilisation is one of the African Continental Free Trade Area’s (AcFTA) key tenets also vouched for by the African Tax Administration Forum (ATAF).
This subject was one of those which took centre-stage in an ATAF side event in the recent 51st session of the Economic Commission for Africa (ECA) and the conference of African ministers of finance, planning and economic development held at the United Nations Conference Centre in Addis Ababa two weeks ago.
The ministerial segment was preceded by a preparatory meeting of the committee of experts.
The AcFTA pushes for minimal reliance on donors to help bolster development, so that countries like Eswatini can use taxes as an engine for economic growth.
However, such efforts are constantly being undermined by illicit financial flows which drain the continent of an estimated $50 billion every year.
As a voice on African tax issues to inform and influence the global dialogue, ATAF is increasingly becoming important in the development and shaping of tax policy in the continent.
legislation
The organisation recently achieved revised legislation on transfer pricing in many countries where these legislations have come into law.
Also, ATAF has played an important role in revenue mobilisation through technical assistance programmes that have identified revenue gaps and have returned money to countries to the tune of over $150 million.
Even though taxation remains a sensitive matter for many Emaswati at the moment, one of the issues which emerged in ATAF’s side event at the 51st ECA was the need to address trade mis-invoicing and abusive transfer pricing by some multi-national corporations through technical assistance and country cooperation at a continental level.
A call was also made by Akingbolahan Adeniran, Rule of Law Advisor to the Vice-President of Nigeria, to ‘amplify advocacy’ for the return of illicit financial assets from developed countries to source countries on the African continent.
In the meantime, ATAF Executive Secretary Logan Wort and the African Union Commission Vice-Chair engaged in a discussion on advancing capacity for effective tax administration to enhance domestic resource mobilisation, curbing tax frauds and corruption in Africa, with the aim of improving the living standards of the continent’s people.
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