By Gift Samuel, The Sight News
Abuja-Vice President Prof. Yemi Osinbajo, has on Tuesday called on African tax administrators to as a matter of urgency, address issues relating to Base Erosion and Profit Shifting (BEPS) so as to increase transparency in resource mobilisation.
Osinbanjo who made this call at the opening ceremony of an international conference of Africa Tax Administration Forum (ATAF), said that the containing Base Erosion and Profit Shifting- which has also done significant damage to domestic resource mobilization in Africa, a range of potential actions are planned by OECD countries.
While noting that the Continent also need to ensure transparency and information sharing among member states, Osinbajo added that information sharing involves establishing automatic information exchange as the new global standard for cooperation in tax matters and ending legal secrecy of ownership of companies and trusts, especially those based in tax havens.
According to him, “After the international conference in 2008 on a somewhat similar theme: Taxation, State building and Capacity development in Africa, senior tax administrators and policy makers from 39 African countries agreed to work towards the establishment of the forum as a platform for sharing best practices in taxation matters in the region, it is worth noting that the tax problems of African states have remained much the same in complexity and character since”.
The Vice President who declared that the problems of domestic resource mobilization, addressing the tax gap, or the difference between what is collected and what could be collected is the major issue on tax in developing countries,emphasized that the use of aggressive and often suspicious tax planning and transfer, mis-pricing multinationals minimize their tax payments or put more graphically, dodge taxes.
Osinbajo commended ATAF for the most relevant knowledge exchange opportunity and FIRS who have proved to be one of the most innovative and forward looking tax administrators in Africa.
On her part, the Minister of Finance, Mrs. Kemi Adeosun, said there remained a strong link between an efficient tax system and economic development, even as she underscored the need for a strong, robust and effective tax regimes across Africa.
She said: “There is no rich country with poor tax system and there is no poor country with a strong tax system. It tells you the connection. So, we need to develop a predictable and transparent tax administration that can guarantee efficient flow of revenue. We can do it. Interestingly, there is a collective reawakening in Africa.
“In Nigeria, we are working hard to improve transparency in the system so as to boost confidence of tax payers. They need to know their money is well utilized to ensure they will be willing to pay tax.
“We also need legislative and judicial support to deal with willful tax evaders. Today, we have the lowest tax to GDP in the world at six percent. We are ready to take on it and correct it going forward”, she explained.
Earlier, the Executive Chairman, Federal Inland Revenue Service (FIRS), Mr Tunde Fowler, said there was the need to improve tax systems, increase accountability of States to its citizenry.
Fowler who is the Chairman of ATAF, said member states must strives to build and become the leader on African tax matters by way of efficient and effective tax administrations to improve the living standards of the people.
Also speaking, the ATAF Executive Secretary, Mr. Logan Wort, said ATAF’s core mandate is to strengthen capabilities not only in the international front but also in domestic tax.
He said in the next three days, tax administrations and tax experts would be discussing opportunities and challenges of building strong tax regimes on the African continent.
He called on all stakeholders to honour their commitments in pursuit of their responsibilities in the area of taxation so as to collectively mobilize sustainable revenue streams to finance Africa’s own development agenda.