Tuesday, December 01, 2009

African tax administrators to share information?

This report from Uganda's Daily Monitor, reporting on, the inaugural African Tax Administrators' Forum (ATAF) in Kampala, Uganda, is interesting:

"Mr Oupa Magashula, the revenue commissioner South African Revenue Service, said it was imperative for African countries to join taxation forces. Business Power leant that Africa through ATAF, the organisation that enables African tax authorities to collaborate, are plotting to set up a platform, which will make it difficult for multinational and transnational corporations to evade taxes.

“We will be setting up a platform where we are able to conduct simultaneous audits of both local and multinational companies,” said Mr Magashula. Ms Allen Kagina, the commissioner general Uganda Revenue Authority, said the system would enable the various member tax bodies to exchange information about multinationals so that there revenue flows are tracked and taxed.

“We should be able to share information so that when we tax them, we are not being unfair to them or they are not hiding anything from us,” she told journalists at the news conference. The tax administrators also plan to boost their technical capacities to be able to implement effective tax policies and mobilisation on the continent.

“You may find that one country has more technical capacity than another and therefore we should be able to help one another in gaining the experience of taxing multinationals,” she said."

This all makes great sense, of course. Slowly, in different forums in different parts of the world, international co-operation on tax and transparency is beginning to build. Read a selection of other speeches from the event here.

Yoweri Museveni, the long-standing and, it has to be admitted, rather controversial, president of Uganda, asked a very good question:

"mother’s milk is like the foreign aid we receive every year in Africa. When will Africa be weaned of this milk?"

and he noted Uganda's impressive strides in improving its capacity to finance itself from US$2m in 1986 to over $2bn annually today -- adding:

"Tax revenue mobilisation is important because it is potentially the biggest source of long term financing for sustainable development and is the lifeblood of all state services which include the provision of public services such as healthcare, education and infrastructure. Domestic revenue mobilisation is crucial because taxation strengthens democracy, increases incentives for public participation and strengthens the social compact between citizens and the state and so can serve to strengthen democracy and develop accountability between state, business and citizens."

True. Something important is emerging here.

On a separate but related matter, this article on Export Processing Zones is worth a read too, in conjunction with this.


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