African tax experts meet in Uganda over revenue mobilization

Source: Xinhua| 2019-11-20 17:34:51|Editor: xuxin
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KAMPALA, Nov. 19 (Xinhua) -- African tax experts on Tuesday started a four-day meeting here aimed at addressing tax leakages that are affecting domestic revenue mobilization on the continent.

Ugandan President Yoweri Museveni opened the 4th International Conference on Tax in Africa held by the African Tax Administration Forum (ATAF), Africa's largest body that collectively deals with global tax issues affecting the continent, with a total of 38 African countries being its members.

The president said African countries need to work together in curbing illicit financial flows (IFFs) from the continent, which is a major problem that hinders development.

"This is a problem that not only affects Uganda but touches all our countries," said Museveni. "The advancement of globalization means that we are now connected and what one country feels in the form of a negative effect, indirectly impacts another African country."

Figures from a report of the High-Level Panel of IFFs showed that illicit flows out of Africa were considered to be at around 60 billion U.S. dollars annually.

Doris Akol, commissioner general of Uganda Revenue Authority, said the ATAF has done a good job in helping African countries curb IFFs through the ATAF Double Taxation Agreement (DTA).

"Many African countries, Uganda inclusive, have been dealt a raw deal from unscrupulous DTAs used by companies to rip developing countries of huge sums of money," said Akol. "The ATAF DTA seeks to create agreements that favor revenue mobilization for African countries."

She said that the ATAF DTA model will curb IFFs such as transfer pricing, profit shifting and non-double taxation.

Ugandan Minister of Finance Matia Kasaija said as the global economy continues to get digitized, Africa needs to harness innovations in technology to improve tax systems.

Kasaija added that innovative solutions are needed to address the policy challenges that countries face in dealing with taxation of the digital economy.

E-commerce, according to Logan Wort, executive secretary of the ATAF, can be abused and used to erode countries' tax bases.

"E-commerce creates difficulties in the identification and location of taxpayers, the identification and verification of taxable transactions and the ability to establish a link between taxpayers and their taxable transactions, thus creating opportunities for tax avoidance," Wort noted.

Experts argued that as taxation of the digital economy is globally debated, Africa must be better equipped to influence the discussion positively.

The notion of digitized economies is getting more prevalent in Africa, where countries are innovating mobile technologies like the more developed countries.

Data from the Central Bank of Kenya showed that mobile money transactions stood at 38.5 billion dollars in 2018, a 10-percent increase year-on-year, indicating that a total of 108 million dollars is transacted through mobile cash per day.

Under the theme of "Innovation -- Digitalization and harnessing Technology to Improve Tax Systems," the conference runs until Friday.