CAPACITY DEVELOPMENT OF AFRICAN TAX ADMINISTRATIONS CHALLENGES AND OBSTACLES

Transcription

1

2 CAPACITY DEVELOPMENT OF AFRICAN TAX ADMINISTRATIONS CHALLENGES AND OBSTACLES ATAF Presentation at the International Tax Compact Workshop: Joining Forces to Mobilize Domestic Resources for Development By Maj. (rtd) Daniel Ablorh-Quarcoo Commissioner: IRS (Ghana) & ATAF Council Member

3 Background to ATAF Ideas around the establishment of ATAF emanated from deliberations at the International Conference on Taxation, State building and Capacity Development in Africa held in Pretoria, South Africa from August With the guidance provided by a Steering Group of 7 Commissioners, work commenced on drafting the ATAF founding documents. ATAF formally came into being on 19 November 2009 at its Inaugural Conference in Kampala, Uganda with the signing of the ATAF Agreement by 25 African countries. A Council of 10 members was elected (namely Botswana, Gabon, Ghana, Kenya, Morocco, Nigeria, Rwanda, Senegal, South Africa and Zimbabwe) with Commissioner Oupa Magashula of SARS as the 1 st Council Chairperson. The permanent seat of the ATAF Secretariat is in Pretoria, South Africa. Several more African countries have indicated their intention to join the organisation.

4 ATAF Objectives Recognition of the important role in tax administration in the promotion of economic development and good governance; Establishment of a culture of professionalism and mutual support in African tax administration; Promotion and facilitation of mutual cooperation among African tax administrations in order to increase the level of voluntary tax compliance in member countries; Identification of mechanisms that allow for combating tax evasion and avoidance, especially by means of agreements for collecting, analyzing and disseminating relevant tax information; Establishment of a best practice guide to ensure effective implementation of African tax strategies; Coordination of capacity development and technical assistance through seminars, workshops and training courses on taxation to respond to the needs and interests expressed by ATAF members; Focus placed also on activities involving diagnosis, follow-up and evaluation of projects aimed at strengthening African tax administrations.

5 Drivers of the ATAF Capacity Development Approach Many African countries face significant challenges in respect of the effectiveness of their tax systems. Overall revenue yields and voluntary compliance are low. African tax bases mostly remain narrow, while the informal sector continues to grow. The taxation of international transactions, in particular transfer pricing, has become increasingly difficult. The overall tax gap remains unquantified. Improving revenue performance will require a major improvement in tax administration through: - better service delivery, and taxpayer education, effective use of automated systems; - better cooperation among tax administrations to counter tax evasion & aggressive tax planning; and - strengthening audit and human resource management capability.

6 Challenges for Capacity Development Tax administration reform projects on the African continent have posed particular challenges divided into core administrative and contextual factors, which influence the administration s operations: Insufficient political support for, yet unrealistic expectations of tax administrations Unfair tax systems so poor voluntary compliance Lack of administrative capacity / skills Great deficit in specialised skills Inadequate automation and information technology systems Complexities of taxation of African natural resources Insufficient mechanisms for acquiring third party data Lack of exchange of information with other administrations Lack of strategies for dealing with burgeoning small businesses and informal sector Uncoordinated audit operations

7 Framework for Capacity Development Programme of demand-driven technical events organised in 2009, even before formal establishment of ATAF, and are continuing in the 2010 program. Sharing of experiences on tax models, standards and guidelines, on approaches to key international tax issues, good practices and tax reform processes. The aim is to conduct interventions that deliver measurable outcomes and concretely contribute to the creation of an accessible skills and knowledge base on tax matters in Africa. Technical events held thusfar include those on Transfer Pricing (Uganda, July 09), Taxation of Mineral Resources (Botswana, October 09), Domestic Resource Mobilisation (Korea, December 09), Financial Markets (Austria, December 09).

8 Framework for Capacity Development (cntd) Overall capacity development programme will reflect needs of African administrations and will encompass the following areas: An annual flagship activity leading to publication of research; Peer learning and benchmarking based on research and analysis into comparative African tax administration and good governance; High-level dialogue to develop understanding of, and approaches to, common challenges in tax administration; Creation, development and maintenance of an online database of African taxation systems and methodologies; Delivery of annual programme of training interventions; and Establishment of an African Tax Centre.

9 Collaboration on Capacity Development Integral part of ATAF approach: Build on work done in African tax administrations by OECD, IMF, African Development Bank, GTZ and other development partners. Establishment of ATAF provides a framework through which tax administrations and development partners can progressively develop robust institutions and human resources.

10 Thank you