Nara Monkam
The recent Third International Conference on Financing for Development, held in Addis Ababa in July, has highlighted Africa’s own agenda for financing development for the next two to three decades.
Organisations and country representatives around the world were at this conference, which discussed how Africa could finance its development and rely less on foreign aid.
The African Union’s (AU) Agenda 2063 epitomises the African development programme for the next five decades.
According to the AU, Agenda 2063 “is an approach on how the continent should effectively learn from the lessons of the past, build on the progress now under way and strategically exploit all possible opportunities available in the short, medium and long term, so as to ensure positive socioeconomic transformation within the next 50 years”.
The African Tax Administration Forum (Ataf), the premier tax organisation on the continent, hosted a side event at the Financing for Development conference in Addis Ababa called “The African Agenda 2063: Finding the Money”, with the sub-theme: “Developing African tax systems in order to mobilise domestic resources to fund Africa’s development”.
The aim of this event was to look at how the continent could finance its own development, in line with the AU’s Agenda 2063, and no longer be dependant on foreign aid.
The Ataf event focused on the domestic resource mobilisation (DRM) and taxation part of Agenda 2063. Participants from around the world discussed the role of revenue mobilisation as an important addition to the forms of financing economic growth and social development of the continent.
The meeting was addressed by, among others, Zimbabwe’s Minister of Finance, Patrick Chinamasa; Dr Anthony Mothae Maruping, AU Commissioner for Economic Affairs; Gershem Pasi, Commissioner General of Zimbabwe Revenue Authority and Chairman of the Ataf council; Logan Wort, the Ataf Executive Secretary; Lilianne Ploumen, Minister for Foreign Trade and Development Cooperation of the Netherlands; Rished Bade, Commissioner General of the Tanzania Revenue Authority; and Manuel Sager, State Secretary and Director-General, Swiss Agency for Development and Co-operation.
Some of the key issues raised during the side event included building fair and efficient tax systems, building tax capacity, managing the taxation of multinational enterprises and the extractive industries and enhancing tax compliance.
Other issues were improving the efficiency and effectiveness of spending, increasing and stabilising the tax base over time, collecting more and/or collecting better; and countering illicit financial flows, especially trade misinvoicing.
The Addis Tax Initiative, which was adopted at this conference, went some way towards outlining a situation finding ways where countries will be able to strengthen their tax systems and achieve the UN’s Sustainable Development Goals (SDGs).
“Mobilising the revenues needed to further development and improve people’s lives will depend on broader tax bases, stronger tax institutions, and redoubled efforts to stem both cross-border and domestic tax evasion and avoidance.
“In many countries, billions of dollars are lost every year to narrow tax bases, weak administrative capacity, and poor tax compliance,” said a media release after the Addis conference.
“In launching the Addis Tax Initiative, over 30 countries and international organisations have now teamed up to strengthen international co-operation in this area.
“The initiative highlights the crucial importance of domestic revenue for financing development and specifically stresses the importance of tackling domestic and cross-border tax evasion and avoidance.”
A central theme running through these discussions has been the importance of bringing policy, legislation and administration together to ensure productive and beneficial tax policy and administration, reliable and consistent legislation and an enhanced taxpayer’s experience on the continent.
It is important to note that, historically, tax policy and legislative benchmarking have been taken from the developed world and international organisations from outside the continent.
The rise of organisations such as Ataf has shown the value and strength of domestically generated thought leadership on tax policy, legislation and administration, and their impact on growth in Africa.
It is therefore exciting to see the birth of the African Tax Research Network (ATRN) in Cape Town this week (September 2 to 4, 2015) where academics, scholars and researchers from Africa and beyond will meet to discuss more than 45 research papers on a broad range of tax policy, legislative and administrative matters relevant to Africa.
These papers will eventually be considered for a premier multidisciplinary African tax journal.
These developments in African efforts have strengthened DRM, aim at financing the continent’s development, and generating its own initiatives and thought leadership and institutions. It should send a strong message to people and organisations on the continent and the world that the time for Africa has indeed come.
l Dr Monkam is Director of Research at Ataf and Chairperson of the ATRN