2024-01-25 09:04:29
Although many African countries appear to have made considerable progress in increasing government revenues, the truth is that this progress remains precarious compared to countries in other regions of the world. If African states hope to reduce poverty by relying on international assistance which is becoming increasingly rare and conditional due to geopolitical uncertainties, they are seriously mistaken. They should seek internal sources of financing which, according to experts, remain untapped.
Issa DA SILVA SIKITI
Increasing tax revenue is therefore a necessary element for governments to be able to improve basic services and, consequently, reduce poverty, underlines the International Monetary Fund (IMF).
Mick Moore, professor at the Institute of Development Studies and founding director of the International Center for Tax and Development (ICTD), and Dr. Wilson Prichard, professor at the University of Toronto and executive director of the ICTD, have compiled a list of eight strategies that governments in many low-income countries, and particularly the least performing ones, need to implement to potentially increase revenue.
“Fight more actively and effectively against poor evaluations of transfers within transnational companies; better tax mining activities; increase excise taxes on tobacco and alcohol; reduce tax exemptions for investors; better implement the value added tax (VAT), more actively tax the income and assets of the growing number of wealthy citizens, tax the ownership and occupation of urban real estate more heavily; and require government agencies to be better “tax citizens,” they explained in a working paper published on the ICTD website.
Reformer l’administration fiscale
Furthermore, the IMF is calling on African governments to reform tax administration with a fundamental focus on reducing corruption and tackling the problem of non-compliance. Next, the Bretton Woods institution identified priority areas for action to help frame the debate on the subject of increasing public revenue. “Above all, countries should avoid taxes that hinder economic development or job creation. Instead, they should be designed to be pro-development and pro-employment,” says Mark Plant, former deputy director of the IMF’s Africa department and current director of operations and CEO of the Center for Global Development (CGD) Europe. .
He supports the two ICTD experts, already cited above, on the elimination of tax exemptions. “In African countries, these sums are often very large and can deprive the state of a significant part of the revenue and, inevitably, they favor certain people, which is not fair.”
According to Mark Plant, it is important to make VAT less complicated through lower tax rates, fewer exemptions and a reasonable threshold that keeps small taxpayers out of the VAT system and ensures equity between individuals. “It is also important to adopt clear laws and regulations that provide strong protection for taxpayers against harassment by tax officials. Again, this ensures that taxes are administered fairly.”
QA January 25, 2024
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