hotpot ictA toGo

Issue 1 October 2015
African tax
hotpot
2015
Illicit
Financial
Flows
ICTA
in TOGO
ATRN big bang launch
AFRICA’S MONEY TO FUND
AFRICA’S DEVELOPMENT
2
African Tax HOTPOT - Issue 1 - October 2015
contents
Editors memo
4
Message from the Executive Secretary
5
Letter from the Chairman
6
Togo host of 2nd ICTA Conference
7
Illicit financial flows to grab limelight
8
Mbeki on a mission to curb illicit financia flows
10
Using Africa’s money to fund Africa’s development
12
EOI pilot phase commences with big bang
14
FACTA set to increase Africa’s Revenue base
15
Inaugural ATRN congress endson a high note
16
Africa fast becoming investment of choice: Monkam
18
Madagascan research student scoops top homours at first ATRN congress
22
What they said at ATRN launch
24
African academics grace launch of tax research network
25
SARS boss: Paying taxes is a patriotic act
26
Legal counsel network established
28
ATAF to improve txcompliance among multinational companies
29
CBT Committee makes positive strides
30
African tax outlook takes shape
31
Innovation awards: A major highlight in Lome
32
89% pass tax treaties online course
33
New website roars into life
34
High level ICT taxconference an eye-opener
36
Executive masters in taxation a powerfully accredited degree
38
Editor - Taungana Ndoro
Creative Director - Kai-Jen Tsai
Disclaimer: African Tax HOTPOT is published by the African Tax Administration Forum (ATAF) and distributed free of charge. Material in this
publication is for the purposes of informing, educating and entertaining. ATAF shall not accept responsibility for loss or damage arising from use of
material in this publication and no liability will attach to ATAF.
African Tax HOTPOT - Issue 1 - October 2015
3
Editor’s
Memo
Catch a vision of Africa with
ultra-modern
infrastructure,
skyscrapers, freeways, bullettrain railways, fully-equipped
hospitals, high-grade schools
and universities. Picture a
vivid image of processing
plants, first class industries,
and power-generated 24hours
manufacturing conveyer belts.
See yourself amongst smiling
African faces, with healthy skin
textures and dressed in the
finest fabric in the world.
Imagine any one of the following newspaper headlines: Africa pours donations for Europe’s
migrants or The US extends a begging bowl to African governments or China pleads with Africa
for manufactured goods. Just imagine.
This imagination may be the enjoyment of all Africa if the magnificent work of members
of the African Tax Administration Forum (ATAF) is anything to go by and this is why its
Secretariat has decided to keep you abreast with that grand vision of improving the living
standards of the people of Africa by launching its sizzling magazine, the African Tax
HOTPOT.
The magazine which will be published bi-annually will keep you warmed up with the
latest information on how Africa is manoeuvring an economic coup for the benefit of its
inhabitants. Its name has been carefully chosen to reflect that it will discuss all the burning
issues with regards to tax and taxation in as far as they affect the vision of Africa’s escape
plan from marginalisation.
It is against this background that in this inaugural issue of the HOTPOT you will read about
the burning issues of Illicit Financial Flows, Tax Compliance, ICTs, Cross Border Taxation,
Transfer Pricing and Base Erosion and Profit Shifting amongst other simmering global
issues on tax that affect Africa’s emancipation.
Ensure you take home this issue with you and keep in mind all the hot issues that Africa is
battling with as it strives to improve the performance of tax administration in Africa because
better tax administration will enhance economic growth and increase accountability of the
continent to its citizens. More effectively, top-of-mind awareness of tax issues affecting
Africa will ensure that governments on the continent mobilise domestic resources that are
in abundance in order to achieve the vision envisioned in the introduction of this memo.
We will be grateful to receive your advertising support so that we do our best to self-fund
this project. After all, advertising in the HOTPOT is the first step towards motivating for
domestic resource mobilisation that will ensure this magazine, like the Africa of the future,
will never need to rely elsewhere to serve you exciting information on tax matters in Africa.
Lick your fingers as you flip through the HOTPOT pages remembering that the taste of the
pudding is in the eating and never hesitate to provide us with feedback.
You’re served.
Taungana Ndoro
Editor
4
African Tax HOTPOT - Issue 1 - October 2015
Message
from the
Executive
Secretary
It is a great honour to meet with
you through our latest ATAF
medium of communication,
the African Tax HOTPOT
magazine in which we will be
giving timely and well-written
updates on the hottest issues
affecting African taxation and
tax administration. Through
this initiative, all significant
matters on ATAF and its
endeavours
of
dedication
towards consolidating and
strengthening
stakeholder
relations in order to advance
African tax reform are on
course to be met.
Indeed, there could not have been a better time to launch this must-have edition for any tax
library other than the 2nd International Conference on Tax in Africa (ICTA) taking place in
Lome, Togo. Through an aptly titled theme, “Tax Compliance and Limiting Illicit Financial
Flows,” ATAF is proud to be holding the 2nd ICTA in West Africa. I would like to thank
the Office Togolais des Recettes Commissioner General Mr Henry Gaperi for agreeing to
host this important conference for us where burning issues of tax compliance, particularly
voluntary compliance, is up for discussion as an essential component among the building
blocks of modern tax administrations.
Obviously, where non-compliance of taxpayers occurs, the question raised is how this can
be attributed to illicit financial flows. It is therefore anticipated that this conference will
be a worthy recognition of the urgency with which African countries should collaborate to
ensure the stemming of illicit financial flows from the continent.
The year 2015 has seen us wade through fundamental initiatives that encourage African
tax reform such as the High-level ICT conference held in Zimbabwe in May; the CrossBorder Taxation consultative conference on transfer pricing guidelines and the potential
impact of base erosion and profit shifting outcomes which prompted the Organisation for
Economic Cooperation and Development to invite ATAF to participate at its fiscal affairs
committee meetings; and the launch of the African Tax Research Network among other
notable milestones such as being recognised internationally as the global voice on all
African tax matters.
Going forward, it is my fervent hope that 2016 will bring with it increased member
participation and ownership of this flagship African tax forum. In 2016, we will also be
looking forward to having our General Assembly as well as the election of a new ATAF
Council to continue advancing the corporate governance matters and strategic direction
of the organisation. The year 2016 further brings with it a new strategic plan following the
expiry of the previous work plan in 2015.
I urge members to remain steadfast and resolute as we endeavour to bring and add value
to all our members. Let us remember that value has a value only if its value is valued.
I wish you happy holidays and a tax compliant 2016 with limited illicit financial flows.
Logan Wort
ATAF Executive Secretary
African Tax HOTPOT - Issue 1 - October 2015
5
letter
from the ataf
chairman
It has been two years since
we had our last International
Conference on Tax in Africa
(ICTA) which was the first
of its kind and hosted in my
home country’s resort town
of Victoria Falls. I recall that
the message was that “we are
Africans and as Africans we
should continue to take control
of our destiny because our
destiny is inextricably linked to
our ability to mobilise our own
resources without over-relying
on Western countries.”
Dear ATAF Members,
Today the message remains the same because Africa is endowed with an amazingly
rich collection of natural resources that range from fauna and flora to mineral deposits,
including oil and gas fields most of which have not even been fully exploited.
African countries face a series of challenges when it comes to optimising taxation while
aiming to reach development targets.
In our quest to attract investment as Africa, we often find ourselves offering over-generous
tax incentives and reduced tax rates to extremely low levels in what some commentators
call the ‘race to the bottom”. This scourge is partly to blame for the illicit financial flows
that we find ourselves engulfed in as a continent and which we will try and find solutions
to during the 2nd International Conference on Tax in Africa.
In some cases, despite a horde of incentives granted to mining ventures for instance, there
still exists a huge incongruence between the incentives provided by host governments
and the revenues realised through taxes and other fees. This can also be attributed to lack
of voluntary compliance which the 2nd International Conference on Tax in Africa is set to
address as well.
It is, therefore, not easy to find the optimal balance between a tax regime that is businessand investment-friendly, while at the same time mobilising enough revenue for public
service delivery.
I would like to urge you to use this conference to look into these matters with a critical
mind so that we can make sound and plausible recommendations.
We should strive to make eradication of poverty and economic development our focal
points in our discussions.
Dear members, Tax Compliance and Limiting Illicit Financial Flows should be a major
catalyst for extricating Africa from the jaws of poverty. I urge you as African tax
administrations to explore how we can work together to improve our capacities to
efficiently and effectively collect revenues for our respective countries.
Above all, let us share notes on best practices to enhance the execution of our
quintessential roles to mobilise resources for our governments. Indeed, we play important
roles in facilitating economic growth and social development through taxation and
our advice to our respective governments on prudent fiscal policies is very critical and
instrumental in the development of Africa.
Till the next issue of the African Tax HOTPOT, I thank you all.
Gershem T. Pasi
ATAF Council Chairman and Zimbabwe Revenue Authority Commissioner General.
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African Tax HOTPOT - Issue 1 - October 2015
TOGO
HOST OF 2ND ICTA
CONFERENCE
The second International Conference on Tax in
Africa (ICTA) will be hosted in Western Africa,
in the small but welcoming country called Togo
which is located between Benin to the east, Ghana
to the west, Burkina Faso to the north and 56km
of coastline along the Gulf of Guinea to the south.
The French speaking African country has
at least 37 African tribes who form 99% of
its population of seven and a half million
which is mainly dominated by the Ewe,
Mina, and Kabre.
This small, sub-Saharan country has an
economy that depends on both commercial
and subsistence agriculture, which pro­
vides employment for a large number of
the population.
Cocoa, coffee, and cotton generate about
40% of export earnings with cotton being
the most important cash crop. Togo is
among the world’s largest producers
of phosphate and seeks to develop its
carbonate phosphate reserves.
The Togolese government decade-long
effort, supported by the World Bank
and the IMF, to implement economic
reform measures, encourage foreign
investment, and bring revenues in line
with expenditures is slowly bearing fruit.
Tourist attractions include the Mandouri
hunting reserve in the northeast, and the
beaches and deep sea fishing of the Gulf of
Guinea coast. The country has social and
political calm.
10 Facts about Togo
1The President of Togo is Faure
Gnassingbe
2The capital city is Lomé
3Togo is one of 16 members of the
Economic Community of West
Africa States (ECOWAS)
4The CFA franc is the currency
used in Togo.
5 Average temperature on the
coast of Togo is 27.5 degrees
centigrade.
The climate in Togo ranges from
hot and humid to tropical.
6There are 2 seasons of rain –
April to July and September to
November
7English is taught in Secondary
School
8Approximately 61% of the
population can read and write
9Soccer is Togo’s favourite sport
10Approximately 21% of the
population are Christian and
20% Muslim
African Tax HOTPOT - Issue 1 - October 2015
7
Illicit Financial Flows
to grab limelight
Tax administrators from all over Africa are
set to meet from 21 to 23 October 2015 in
Lomé, Togo under the auspices of the African
Tax Administration Forum (ATAF) when the
organisation holds its 2nd International
Conference on Tax in Africa (2ICTA). The much
anticipated gathering will be hosted by Mr Henry
Gaperi, the Commissioner General of the Office
Togolais des Recettes (OTR).
Running under the theme “Tax Compliance and Limiting
Illicit Financial Flows” discussions will be centred on noncompliance of taxpayers and answering the big question
of how this can be attributed to Illicit Financial Flows (IFFs).
The conferences hopes to unpack the various structures
associated with IFFs. According to the Africa Economic Outlook
of 2015, 65% of all IFFs occur through international commercial
transactions that include tax evasion, trade mis-invoicing and
abusive transfer pricing, and involve mainly multinational
corporations.
Recognising
the
importance of the
report on IFFs from
Africa produced by the
Thabo Mbeki HighLevel Panel, ATAF
grasped the urgency
with which African
countries
should
collaborate to ensure
the stemming of IFFs
from the continent.
Examining the link between issues of tax compliance and illicit
financial flows and exploring possible recommendations for
African tax policy and administration to effectively counter
their negative impact will thus form the basis of discussions
at the 2ICTA conference in Lomé.
The conference is
targeted at Heads
and Senior Officials
of African tax
administrations and
Ministries of Finance
The conference will discuss strategies of increasing
voluntary compliance which is an essential component
among the building blocks of modern tax administrations.
As identified in the ATAF Report on Good Tax Governance
of 2011, developing a culture of compliance requires that
8
African Tax HOTPOT - Issue 1 - October 2015
at 2nd International
Conference on
Tax in Africa
tax administrations view and treat taxpayers first as clients
rather than tax evaders and avoiders. Well-defined and wellexecuted educational campaigns by tax administrations
through the media and other new technologies can greatly
help in ensuring that taxpayers understand and accept the
compliance requirements. However, the most important
objective of these measures taken is that clients must
understand that the cost of dodging taxes and the risk of
getting caught is high, and penalties must be applied when
evasion is detected.
The conference is targeted at Heads and Senior Officials of
African tax administrations and Ministries of Finance,
while representatives of international and
continental organisations, as well as
from the private sector, civil society
and academic institutions, are
also invited to contribute to the
understanding of the issues at hand.
65% of all IFFs
occur through
international
commercial
transactions that
include tax evasion
The ICTA conferences alternate
annually with the ATAF General
Assemblies. Past themes of these
gatherings have been on “The
International and Domestic Aspects
of Tax Fraud, Evasion and Avoidance”
in Mauritius in 2011; “Challenges of Tax
Sovereignty, Competition and Cooperation:
The Benefits and Risks of Tax Incentives and
Exemptions for Economic Development in
Africa” in Senegal in 2012; “The Taxation of
Natural Resources in Africa” in Zimbabwe
in 2013; and “Rethinking Leadership and
Management Strategies in the African Tax
Agenda” in Tanzania in 2014.
ATAF was established in November 2009
in order to create a platform to promote
and facilitate mutual cooperation among
African tax administrations and other
relevant and interested stakeholders with
the aim of improving the efficiency of their
tax legislation and administration. It is an African
organisation reflecting African needs and strategies. Its work
and program priorities are driven and managed by African
countries with the support of donor agencies, and various
other tax administrations and international organisations.​
For more information, visit the ATAF website at
www.ataftax.org
African Tax HOTPOT - Issue 1 - October 2015
9
Mbeki On Mission
To Curb Illicit Financial Flows
Increasingly, African organisations are paying particular attention to the plight of
illicit financial flows from the
continent. This campaign is
spearheaded by the Former
President of the Republic of
South Africa, H.E. Mr Thabo
Mbeki together with a highlevel panel and has culminated
in a report that recommends
action items. The African Tax
Administration Forum (ATAF)
is identified in the report as
a key agency in assisting
African countries improve
their revenue agencies to
combat illicit financial flows.
10
A sub-regional workshop took place in
Nairobi, Kenya from 14 – 15 September
2015 to place into context the various
agencies named in the report and the
work they have conducted in relation
to the recommendations. Chaired by
President Mbeki, ATAF’s contributions
to the workshop were made by the
Executive Secretary Mr Logan Wort and
Mr Thulani Shongwe speaking on the
ATAF Model Double Tax Agreement and
ATAF’s participation in BEPS respectively.
It is worth noting that the audience was
excited by the prospects of a double
tax agreement model which takes into
account both OECD and UN standards.
Transfer pricing featured largely during
the course of the workshop and providing
the update on the delivered actions in the
OECD BEPS Project, Mr Shongwe shared
with the audience the achievements and
short comings of ATAF interventions.
Most notably, ATAF’s impact on the
OECD Transfer Pricing Guidelines has
resulted in changes to Chapters 1, 2, 6
and 7 and have also resulted in inputs
African Tax HOTPOT - Issue 1 - October 2015
made on thin capitalisation rules for
multinational
enterprises
by
giving
African tax administrations a mandatory
approach which suits the current African
perspectives.
Transfer pricing featured
largely during the course
of the workshop
During the workshop’s final session
and in concluding the workshop, the
Director for Capacity Building in the
United Nations Economic Commission
for Africa (UNECA), Dr Adeyemi Dipeolu
noted the role to be played in expanding
the sub-regional interchanges in Central
and West Africa. ATAF will participate
in those workshops by directly involving
Directors-General of member countries to
participate and provide overviews on the
concern areas of the HLP Report.
African Tax HOTPOT - Issue 1 - October 2015
11
Using Africa’s
money
to fund Africa’s
development
By Dr Nara Monkam
The recent Third International Conference on Financing for
Development, held in Addis Ababa in July 2015, has brought into
sharp focus Africa’s own agenda for financing development for the
next two to three decades.
Organisations and country representatives
from around the world were represented at
this conference where they discussed how
Africa could finance its own development.
In focusing on Africa’s own development,
one needs to look at the African Union
(AU)’s Agenda 2063 because this Agenda
epitomises the African programme for its
development for the five decades.
According to the AU, Agenda 2063 “is an
approach to how the continent should
effectively learn from the lessons of the
past, build on the progress now underway
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 subtheme: “Developing African tax systems
in order to mobilise domestic resources to
fund Africa’s development”.
The aim of this side event was to look at
how the continent could finance its own
development, in line with the African
Union’s Agenda 2063, and no longer be
dependent on foreign aid.
The ATAF event of course focused on the
domestic resource mobilisation (DRM) and
taxation part of Agenda 2063.
The event was a huge success, and was,
in fact, oversubscribed. Interested African
and non-African participants discussed the
Agenda and the role of revenue mobilisation
as a concrete and important addition to
other 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, African Union Commissioner
for Economic Affairs; Gershem Pasi,
Commissioner General of Zimbabwe
Revenue Authority and Chairman of the
12
African Tax HOTPOT - Issue 1 - October 2015
ATAF Council; Logan Wort, the ATAF
Executive Secretary; Lilianne Ploumen,
Minister for Foreign Trade and Development
Cooperation of the Netherlands and CoChair of the Global Partnership for Effective
Development Cooperation; Rished Bade,
Commissioner General of the Tanzania
Revenue Authority; and Manuel Sager,
State Secretary and Director-General, Swiss
Agency for Development and Cooperation.
In launching the
Addis Tax Initiative,
over 30 countries
and international
organisations have now
teamed up to strengthen
international cooperation
in this area.
Some the key issues raised during this side
event included building fair and efficient tax
systems (i.e. tax policy, tax administration
and tax legislation); building tax capacity;
managing the taxation of multinational
enterprises and the extractive industries;
enhancing tax compliance; improving the
efficiency and effectiveness of spending;
increasing and stabilising the tax base over
time; collecting more and/or collecting
better (i.e. through a better understanding
of “modern” forms of revenue sources
such as e-commerce, telecommunications,
industry intangibles, etc.); 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 where countries will
be able to strengthen their tax systems
and achieve the 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 cooperation
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.
“Harnessing the momentum of the
Financing for Development agenda,
the Addis Tax Initiative brings new
energy and enthusiasm to the field of
domestic resource mobilisation (DRM),
emphasizing the importance of building
sustainable DRM capacity through
increased technical cooperation, strong
domestic governance and institutions,
and the political will to drive forward tax
system reforms.”
The following countries have joined the
Addis Tax Initiative: Australia, Belgium,
Canada, Cameroon, Denmark, Ethiopia,
European Commission, Ghana, Finland,
France, Italy, Germany, Indonesia, Kenya,
Korea, Liberia, Luxembourg, Malawi,
Netherlands, Norway, Philippines, Sierra
Leone,
Senegal,
Slovenia,
Sweden,
Switzerland, Tanzania, United Kingdom,
and the United States. In addition, the
following
international
organisations
have expressed their support for initiative:
ATAF, Commonwealth Association of Tax
Administrators (CATA), Inter-American
Centre of Tax Administrations (CIAT),
IMF, OECD, World Bank and the Global
Forum on Transparency and Exchange
of Information for Tax Purposes. And the
Gates Foundation.
A central theme running through these
discussions has been the importance
of bringing policy, legislation and
administration together in order to ensure
productive and beneficial tax policy and
administration, reliable and consistent
legislation and an enhanced taxpayer’s
experience on the continent.
The event was a huge
success, and was,
in fact, oversubscribed
In this regards, 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 thoughts
leadership on tax policy, legislation and
administration and their impact on growth
in Africa.
(Dr Monkam is Director of Research at
ATAF and Chairperson of the ATRN)
African Tax HOTPOT - Issue 1 - October 2015
13
eoi pilot
phase
commences
with big bang
Zimbabwe and Tanzania were the first ATAF
member countries to receive technical assistance
as part of the pilot phase of the ATAF Exchange of
Information (EOI) Project. The expert facilitator,
Mr R. C. Terblanche facilitated the training for
the Zimbabwe Revenue Authority August 2015,
while the Tanzania Revenue Authority was
facilitated the following month.
During the three-week technical assistance period, tax officials
received training on, amongst others, establishing an Office of
the Competent Authority, evaluating existing legislation and
policies in relation to EOI and advising amendments thereto, and
providing assistance towards modernisation and standardisation
of information and communication systems for EOI. The EOI
project is meant to adhere to international best practise in terms
of request for information between tax administrations.
Preparations are underway for the Swaziland Revenue Authority
and the Uganda Revenue Authority to receive technical EOI
assistance in October and November 2015 respectively.
“A blog on EOI will be started in October on the ATAF website. The
idea is to have a series of EOI topics such as its importance in
Africa and its relationship to Automatic Exchange of Information
and the Foreign Account Tax Compliance Act,” said Ms Elizabeth
Storbeck the project coordinator.
ATAF member countries who are interested in receiving technical
assistance in EOI for 2016 should contact the project coordinator
on [email protected]
14
African Tax HOTPOT - Issue 1 - October 2015
FATCA set to increase
Africa’s revenue base
Revenue Authorities may now
strengthen their risk analysis
by identifying account holders
that are economically active
but not registered for tax or
taxpayers with unexplained
cash flows through a reciprocal
exchange
of
information
platform that will allow them to
do so.
In a relatively recent development, the
United States of America (US) implemented
the Foreign Account Tax Compliance
Act (FATCA) which requires financial
institutions to report to the Internal
Revenue Service (IRS) information on US
citizens and failure to do so would result
in a withholding tax of 30% on all US
source income. However, the signing of an
Intergovernmental Agreement (IGA) would
allow financial institutions of a country
to report to its revenue authority which in
turn will report, in an Automatic Exchange
of Information (AEOI) format, the relevant
information to the IRS.
This exciting development caused ATAF to
heed a plea from its members by hosting
a seminar on FATCA and AEOI from 20 –
24 July 2015 which was facilitated by an
international tax consultancy expert, Mr
R. C. Terblanche. The seminar focused
on providing delegates with an improved
understanding of AEOI and how FATCA is
relevant to African Revenue Authorities.
The seminar further provided delegates
with an improved understanding of the
complexities posed by an IGA and how the
IGA relates to the US regulations. Delegates
from nineteen ATAF member countries were
led to understand the predicament local
financial institutions would face should
reporting be done directly to the IRS.
This exciting development caused ATAF
to heed a plea from
its members by hosting
a seminar on FATCA
and AEOI
Over the five day training period, participants
engaged in interactive discussion, including
reporting on the current situation in their
respective jurisdictions with regard to the
administration of FATCA.
Following the success of this FATCA
seminar, ATAF will be conducting another
AEOI and FATCA seminar in 2016 which
is hoped to eventually empower tax
administrations in Africa to increase their
revenue base.
African Tax HOTPOT - Issue 1 - October 2015
15
Inaugural ATRN Congress
ends on a high note
The African Tax Research Network (ATRN)
which was launched in Cape Town, South Africa
at a colourful ceremony on 2 September 2015
ended on a high note after a three day
conference in which acclaimed academics,
researchers, tax policy and administration
experts hailed its inaugural congress as a
solution provider to Africa’s domestic resource
mobilisation challenges.
Running under the theme “Contemporary Tax Challenges for
African Countries”, the high-profile delegates discussed at least 48
quality academic research papers (in French and English) on a wide
range of topics relevant for African policy development to improve
taxation on the continent.
The ARTN Congress provided a
unique platform to end unethical
and unorthodox practices within
Africa by discussing pragmatic
mechanisms of curb transfer
mispricing, base erosion and profit
shifting. The plot to resuscitate
the standards of living on the
continent through research on tax
matters echoed throughout the
Congress and was reinforced by
African Tax Administration Forum
(ATAF) which is the mother-body
of ATRN.
Academics,
decision makers
and tax experts
found unity
in discussing
well-researched
presentations
“As Africans, we need to invest in a framework for growth. We
need to watch and guard against harmful tax competition,” said Mr
Gershem Pasi the ATAF Council chairperson.
Delegates felt that networking for tax research purposes should
ordinarily result in the growth of shareholder value and provide
overall direction for financing Africa’s development.
It was generally agreed that the contribution of natural resources
to the African fiscus was not commensurate with the amount of
natural resources that were being exploited. The congress sought
to introspect how to enhance revenue contributions from these
resources through various strategies and recommendations that
were put forward by some of the sharpest brains in tax matters on
the continent.
16
African Tax HOTPOT - Issue 1 - October 2015
Academics, decision makers and tax experts found unity in
discussing well-researched presentations and harnessed
networking opportunities for enhancing the quality of a number of
research papers that were work-in-progress.
As Africans, we
need to invest in
a framework for
growth
“We have sought out high-quality
submissions that further the
knowledge and understanding
of
national,
regional
and
international tax matters,” said
ATRN chairperson Dr Nara
Monkam.
Some of the topics presented by global scholars at the congress
included issues to do with the major drivers of revenue losses
on the continent; investment in improved tax systems as well
establishment of transparency, accountability and financing for
sustainable development in Africa.
ATAF executive secretary, Mr Logan Wort, said the launch of ATRN
was an important initiative to promote greater research capacity on
matters of taxation in Africa.
“One of ATRN’s aims was to develop thought leaders in tax matters
on the continent and to broaden the base of tax experts,” said
Mr Wort.
The conference was attended by a number of prominent
personalities that provided key inputs to the discussions. Among
them were Dr Adam Elhiraka, Director of the Macroeconomic Policy
Division at the United Nations Economic Commission for Africa;
Mr Tom Moyane, the Commissioner of South African Revenue
Services who opened the congress; distinguished author of the
book International Tax Law: Offshore Avoidance in South Africa,
Professor Annet Oguttu who lectures tax law at the University of
Pretoria; Mrs Allen Kagina the Executive Director of the Uganda
National Roads Authority and former Commissioner General of
the Uganda Revenue Authority amongst other tax experts who
debated on various priorities for the continents sustainable
development.
African Tax HOTPOT - Issue 1 - October 2015
17
AFRICA FAST BECOMING
INVESTMENT DESTINATION
OF CHOICE: MONKAM
We caught up with the African
Tax Research Network (ATRN)
interim board chairperson
Dr Nara Monkam NM) and
below is the interview she
gave the AfriTax Tribune (ATT)
concerning the launch of ATRN
and African tax matters among
other issues.
ATT: What are the benefits of having an
African tax think tank?
NM: The African Tax Research Network is
not a think tank but a network of researchers
working on tax issues around the continent.
For the next three to five years, the
ATRN secretariat will be housed within the
African Tax Administration Forum (ATAF)
until it becomes a fully functional and
independent body.
The ATRN has the following foundations:
Its vision is to be the platform of choice
for African Tax Research. Its mission is
to facilitate the development of African
capacity for credible research in tax policy,
administration, law and leadership The
objectives of the Network are:
18
African Tax HOTPOT - Issue 1 - October 2015
•
•
•
•
Build an independent network of
academics, policy makers, tax
administrators and independent
tax researchers
Promote links between tax
researchers, policy makers and
other stakeholders
Generate research results for use by
policymakers and tax administrators
Influence the African and global tax
research agenda
Through the above ideas, the ATRN seeks
to conduct high level multidisciplinary
research in the areas of tax policy, tax
legislation, tax administration as well as tax
and development on the African continent,
thereby enhancing the research capacity of
the continent on tax matters.
The concept of an African Tax Research Network (ATRN) started
out as a vision, born out of the recognition of the need for credible
academic research on taxation in Africa. The establishment of the
African Tax Research Network (ATRN) was also the result of the
need to identify potential synergies and linkage areas between
academia, tax officials and tax practitioners in the context of low
technical capacity for tax research on the continent.
Building the research capacity in taxation issues is invaluable on
the continent. In the short term, capacity building in universities
and tax administrations would help to strengthen collaboration
through research projects and partnerships. In the long term,
it would enable and uplift African-based research communities
in providing nonpartisan thought leadership and policy advice
on tax matters and in helping African governments to develop
home-grown solutions to taxation issues on this continent.
In facilitating the development of African capacity for credible
research in tax policy, administration, law and leadership, the
access to tax administrative and economic data would be a critical
source of information and crucial for research and analysis by
government, academia and researchers in the private sector. In
addition, tax administrative data, research and analysis as well as
the improvement in the measurement of key economic variables,
would be immensely useful to policy and decision makers to inform
tax policy formulation and implementation and the performance of
tax administrations in Africa.
ATT: How is it going to help address illicit financial flows?
NM: The launch of the network comes at the right time. Multi-national
enterprises (MNEs) now represent a large proportion of the global
economy, and cross-border trade between members of the same
MNE constitutes a growing proportion of global trade. In addition, the
service component of the global economy is growing in importance
as is the digitalisation of the
global economy. All of these
changes have made it much
easier for businesses to locate
many
productive
activities
in geographic locations that
are distant from the physical
location of their customers.
These
developments
have
opened up opportunities for
MNEs to greatly minimise their
tax responsibilities and, coupled
with increasing sophistication of tax planners in identifying and
exploiting the legal arbitrage opportunities and the boundaries of
acceptable tax planning, this has created significant risk to the tax
base of both developed and developing countries.
Building the
research capacity
in taxation issues is
invaluable on
the continent.
This risk to the tax base of all countries has been recognised at the
highest political levels and led to the G20 Finance Ministers calling
on the OECD to develop the OECD/G20 Action Plan to address
the base erosion and profit shifting issues in a coordinated and
comprehensive manner.
African Tax HOTPOT - Issue 1 - October 2015
19
20
African Tax HOTPOT - Issue 1 - October 2015
Furthermore, the recent Third International Conference on
Financing for Development, held in Addis Ababa in July 2015,
has brought into sharp focus Africa’s own agenda for financing
development for the next two to three decades.
In focusing on Africa’s own development, one needs to look
at the African Union (AU)’s Agenda 2063 because this Agenda
epitomises the African programme for its economic development
for the next five decades.
According to the AU, Agenda 2063 “is an approach to how the
continent should effectively learn from the lessons of the past,
build on the progress now underway 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”.
ATAF, as 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 side event was
to look at how the continent
could
finance
its
own
development, in line with the
African Union’s Agenda 2063,
and significantly minimise
dependence on foreign aid.
The ATAF side event of course focused on the domestic resource
mobilisation (DRM) and taxation part of Agenda 2063.
Africa is fast
becoming the
investment
destination of
choice and its
economic growth
is set to be even
faster over the
medium term
NM: One of the challenges is illicit financial flows which has been
well articulated in question two above in addition we have to note
that Africa is fast becoming the investment destination of choice
and its economic growth is set to be even faster over the medium
term. There is therefore a need for Africa to protect its own tax base
and advance domestic resource mobilisation. In doing that, Africa
faces many challenges which can be placed into five categories
based on the “ATAF Regional Studies on Reform Priorities of African
Tax Administrations, Africa-Wide Report” (2012):
•
•
•
•
•
The modernisation, the generalisation, and the integration of
the Information and Communication Technologies (ICT) remain
a challenge throughout tax administrations in all regions.
Building the capacity of tax administrations is another
recurrent key priority of reform across regions. Special mention
was made regarding strengthening of audit skills, especially
in specialised sectors and in areas of transfer pricing, thin
capitalisations, and industry intangibles.
The predominance of the informal sector and the design of
an effective tax system for the informal sector are other key
priorities of reform in the continent.
The need for improved and efficient information sharing
between tax administrations and government bodies is also
crucial.
Another common priority of reform is to build greater
cooperation between tax authorities across regions.
In addition, there are structural issues to be addressed to allow for
better mobilisation of tax revenues, i.e. good governance, effective
institutions, a responsive policy and legal framework, human and
institutional capacity development, regional integration, global
partnership and multilateral cooperation, and so on.
ATT: Thank you for your time Dr Monkam.
A central theme running through these discussions has been
the importance of bringing policy, legislation and administration
together in order to ensure productive and beneficial tax policy
and administration; reliable and consistent legislation; as well as
an enhanced taxpayer’s experience on the continent.
In this regard, 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 and now the African Tax
Research Network (ATRN) has shown the value and strength
of domestically generated thought-leadership on tax policy,
legislation and administration and their impact on growth in
Africa.
These developments in African efforts that have strengthened
DRM, and aim at financing the continent’s development and
generating its own initiatives and thought-leadership and
institutions will send a strong message to its own constituents
and its partners globally that the time for Africa has indeed come
- at least, on tax matters, if not yet elsewhere.
ATT: What are some of the biggest challenges faced by tax bodies
on the African continent?
African Tax HOTPOT - Issue 1 - October 2015
21
Madagascan research
student scoops top honours
at first ATRN congress
An intriguing transfer pricing
presentation by a Madagascan
academic,
Ms
Tovony
Randriamanalina, who is a
PhD candidate in tax law from
the Paris-Dauphine Doctoral
School landed her a research
accolade at the African Tax
Research Network (ATRN)
Congress held from 2-5
September 2015 in Cape Town,
South Africa after beating at
least 25 other students who
were in the running for top
honours.
In a first for Africa, the African Tax Administration Forum (ATAF) launched the
ATRN last week at a colourful event which
was attended by academics, researchers,
decision and policy makers including
tax experts and administrators. The
network’s mission is to facilitate African
capacity for credible research in tax policy,
administration, law and leadership by
providing a platform of choice for African
tax research.
Tovy, as she is affectionately known
amongst her peers responded to ATRN’s
call for tax research papers and made a
passionate submission for developing
countries
to
tackle
head-on
the
manipulation of transfer pricing, otherwise
known as transfer mispricing, amongst
developing countries.
She said government’s in developing
countries such as Madagascar were
treating the threat of transfer pricing
22
African Tax HOTPOT - Issue 1 - October 2015
without urgency but rather through a futile
arm’s length strategy. Her presentation
advocated for a firm legislation to be put
in place and implemented aggressively
because transfer pricing could greatly
undermine the growth of African economies
if handled through an arm’s length principle.
“We believe that unitary taxation is a viable
alternative to solve the problem raised by
transfer pricing in developing countries.
This method destroys the ability to transfer
profits by multinational enterprises to their
associated companies located in low-tax
jurisdictions,” said Ms Randriamanalina.
“As a tax auditor, I am aware that
multinational enterprises do not pay
their fair taxes. The issue is that they
(multinational
enterprises)
exploit
resources - mining for example - that is not
renewable. Their exploitations of avoiding
to pay tax in developing countries affects
the habitants of those countries. The
first mission of the African revenue authorities must be to ensure
that the tax law is properly applied for all citizens, based on their
ability to pay. I am convinced that “le sort de l’Afrique est entre les
mains des africains” (the fate of Africa is in the hands of Africans),”
explained Ms Randriamanalina.
We believe that
unitary taxation is
a viable alternative
to solve the
problem raised by
transfer pricing
in developing
countries
She has two qualifications, one in
telecommunications engineering
and the other in taxation. She
has worked as a project manager
for a telecoms company in
Madagascar and since 2012 she
has been a tax inspector in the
Madagascar Revenue Authority.
In 2014, she enrolled to study for
a PhD in tax law at the University
of Paris-Dauphine, where she
is researching about transfer
pricing in developing countries.
Following a rigorous adjudication
process that included rating
attributes such as structure and logical style; clear analysis
and coherent articulation of language usage and ideas; use and
suitability of references and synthesis of literature in the appropriate
context; soundness of research methodology in relation to an
original problem statement that is well understood; independent
thinking and credible conclusions and recommendations; the
examiners duly awarded Ms Randriamanalina.
“The paper presents some very relevant research on transfer pricing
rules and their comparison with OECD and UN recommendations.
Both secondary and primary sources of data were used. Secondary
data was collected through documentary review which included
performance reports from developing countries. Primary data was
collected through questionnaires involving both closed and openended questions complemented by interviews from selected key
players. The paper is concluded with policy recommendations,” said
the examiners in their adjudication remarks.
The non-student category at the ATRN research awards ceremony
was won by Dr Samuel Jibao, the Director and CEO for Centre for
Economic Research and Capacity Building and Dr Wilson Prichard,
an Assistant Professor from the University of Toronto and Research
Director at International Centre for Tax and Development whose
joint research was entitled Informal Taxation in Post-conflict Sierra
Leone: Implications for Local Government Tax Reform.
The network’s mission is to facilitate
African capacity for credible research
in tax policy, administration, law and
leadership by providing a platform of
choice for African tax research.
The ATRN awards whetted researcher’s interest to be considered
for the inaugural Research Methods Training and Dissemination
workshop to be launched in Addis Ababa, Ethiopia from
4-6 November 2015 where only 15 successful applicants will
be selected through a very competitive process for the fully
funded training.
African Tax HOTPOT - Issue 1 - October 2015
23
What they said
at ATRN launch
The African Tax HOTPOT
interviewed a cross section of
delegates at the African Tax
Research Network (ATRN)
launch and congress and this is
what they had to say:
“ ATRN is an answer to an existing problem
of not having enough information on tax
issues.”
Ms Agnes Kanyangeyo,
Deputy Commissioner Planning and
Research for Rwanda Revenue Authority.
“It is essential that there be a homebased
capacity for first class tax analysis and tax
research particularly in Africa.”
Mr Mike Durst,
International Centre for Tax and
Development, UK.
“ATRN brings together a whole group
of African researchers on the continent
to understand the tax issues that are
affecting Africa.”
Professor Annet Oguttu,
University of South Africa.
“ ATRN provides a platform to share
information in which we gain knowledge
from each other.”
Ms Wynnona Steyn,
Budgeting and forecasting Unit, South Africa
Revenue Service.
“Through ATRN, we have to try and
educate the citizenry in order to enhance
compliance.”
Mr John Chakasikwa,
Harare International Airport Station Manager
at Zimbabwe Revenue Authority.
“ We picked up a lot of useful concepts to
apply back home.”
Mr Brightwell Kambule,
Swaziland Revenue Authority.
“The significance of the ATRN is capacity
building.”
Professor Estian Calitz,
Stellenbosch University
“In Africa in the field of taxation, we lack
in-depth research. We have pulled together
academics in Africa and out of Africa to
stimulate a focused research of advising
our African Governments on matters of
fiscal policy.”
Mr Gershem Pasi,
ATAF Council Chairperson and Commissioner
General of Zimbabwe Revenue Authority
“ It is important to have an independent
research network for Africans working
in close cooperation because tax is an
interdisciplinary area.”
Professor Sol Picciotto,
Lancaster University, UK.
“ It is the first time we have managed
to bring together experts from a
multidisciplinary background, discussing
real time information on tax matters.”
Professor Attiya Waris,
University of Nairobi
24
African Tax HOTPOT - Issue 1 - October 2015
“ I am impressed I met so many
intellectuals at one place. We need
to focus on e-commerce because all
economies are going digital.”
Mustafa,
Federal Inland Revenue Services, Nigeria.
“ ATRN is stimulating debate on
international tax policy and that’s a great
strength.”
Martin,
London School of Economics.
“It filled a very necessary gap and removed
the silos between researchers and
practitioners in tax matters.”
Ms Feyron Dean,
Tax Consultant based in Accra, Ghana.
“ ATRN came at the right time for revenue
authorities to find solutions to the
challenges they face.”
Mr Joseph Serengo, Kenya Revenue
Authority.
“ Incredibly informative and valuable to us
in knowing the tax challenges in Africa.”
Mr John Hellman, Consultant Tax Technology
Provider, Philadelphia, USA.
African
Academics
grace Launch
of Tax
Research Network
The illegal movement of money from African
countries has robbed the continent of higher
rates of economic growth, South African Revenue
Service Commissioner Tom Moyane said at the
launch of the African Tax Research Network
(ATRN) on Thursday.
“Indisputably, BEPS (base erosion and profit shifting)
has disproportionately and negatively affected African
countries. Concomitant with financial outflows from
the continent, this phenomenon has stunted our growth
prospects,” Mr Moyane said.
BEPS has become an area of attention around the world.
A final package relating to a BEPS report will be presented
to Group of 20 (G-20) finance ministers in October, and
later to G-20 leaders in November.
“Undeniably, at the heart of BEPS challenges is the matter
of transfer pricing, which perpetuates tax avoidance and
tax evasion,” Mr Moyane said.
Transfer pricing refers to the prices used when the
divisions of a company transact with each other.
Domestic revenues collected in Africa today are in excess
of $520bn compared to $50bn received in aid, according
to research.
Mr Moyane said there was a need to “devise new and
innovative domestic resource mobilisation (collection)
instruments” to improve tax systems on the continent.
This article first appeared on the Business Day website
on September 04 2015, at 16:30hrs
African Tax HOTPOT - Issue 1 - October 2015
25
“This we would achieve by marshalling the best African brains
to help define what it is that we must do to reclaim the destiny
of our countries and our continent and to find creative ways to
mobilise our own resources for our own development. In a small
way, I hope todays deliberations will take giant steps forward
in our journey of finding an African solution to Africa’s socioeconomic challenges, he said at the launch of African Tax
Research Network (ATRN).
He cautioned that exports out of African countries are often
under-invoiced so that income accrues abroad, and imports
into African countries are often over-invoiced, again, so that the
excess payment accumulates in foreign accounts. The same
mechanism is used whether the trading relationship is between
subsidiaries of the same corporation or between unrelated, but
cooperating buyers and sellers.
“These illicit outflows is then stashed into tax havens with low
or no taxation,” he explained. “The challenges of illicit financial
outflows from the continent are as a result of carefully calibrated
deceptive schemes, whose sole purpose is to deprive fiscus what
is it’s legitimately due to it.”
He said Governments around the world and tax administrations
are operating in challenging economic times, making the task of
mobilising revenues, boosting economic growth and attracting
capital investments even more difficult.
SARS boss: Paying Taxes
is a patriotic act
CAPE TOWN - African patriots, both on the
continent and part of the diaspora must do what
they can to assert the rising of the continent,
according to SA Revenue Service (SARS)
Commissioner Tom Moyane.
“At an apogee of this pyramid are tax administration authorities
who are tasked to mobilise the required resources year-on-year for
the respective national governments in the continent, and South
Africa is no exception. Taxation is one of the most important ways
in which African countries can mobilise their own resources for
sustainable development,” he said.
“The recently held Conference on Financing for Development in
July in Addis Ababa has firmly re-affirmed the view that we must
look inwardly for solutions to extricate African countries from
underdevelopment. Taxation supports the basic functions of an
effective state by enabling it to raise the resources needed to
deliver essential services and creates the context for economic
growth.”
To him payment of taxes is statutory, but at the centre of it,
the payment of taxes is a patriotic act. At the same time, it is
a catalyst for a social contract between the governed and
government, thereby reinforcing financial citizenship.
In turn, government through its actions becomes more
responsive and accountable to her citizens. Furthermore, for the
above to be attained there has to be clear tax policies and fully
functioning tax administrations with their synergies talking to
the developmental needs of a country.
This article first appeared on the fin24 website on September 06
2015 at 20:00hrs
26
African Tax HOTPOT - Issue 1 - October 2015
African Tax HOTPOT - Issue 1 - October 2015
27
Legal counsel
NETWORK
ESTABLISHED
Legal Counsel from across the African continent
met in Kampala, Uganda on the 24th and 25th of
August 2015 and established a network pending
its formal launch. A total of 18 countries were
represented at the meeting and included; Angola,
Botswana, Ghana , Kenya, Lesotho, Malawi,
Namibia, Rwanda, Senegal, Seychelles, South
Africa, Swaziland, Tanzania, Togo, Uganda,
Zambia and Zimbabwe.
In her remarks, the Commissioner General of Uganda Revenue
Authority Ms. Doris Akol noted with appreciation the zeal with
which the African Tax Administration Forum (ATAF) responded
to request for partnership in establishment of the network.
“I am glad to note that ATAF found it prudent to build upon a
concept that had been originally envisioned by Uganda Revenue
Authority with the aim of ensuring that benefits of collaboration
among legal experts are spread across member administrations”,
she said.
the aim of ensuring
that benefits of
collaboration
among legal
experts are spread
across member
administrations
Ms Akol urged the network
to ensure that African tax
administrations take a common
approach in legislative and
tax policy matters across the
continent. She further pointed
out the need for legal counsel to
take a greater role in technical
matters with legal implications
which have hitherto been a
preserve of tax officers.
The ATAF Executive Secretary was represented at the event by the
Director of Finance and Corporate Affairs Ms. Ediretse Mokara who
observed that the network could not have been established at a
better time as it had a lot to work on including reviewing the ATAF
Agreement, the Agreement on Mutual Assistance on Tax Matters,
and the ATAF Model Double Taxation Agreement among other
critical issues. She announced that there would be a seminar on
Double Taxation in October 2014 at which legal counsel would be
invited.
The high profile workshop of legal minds was officially opened by
the Attorney General of Uganda Hon. Fred Ruhindi.
28
African Tax HOTPOT - Issue 1 - October 2015
ATAF to improve tax
compliance among
MULTINATIONAL COMPANIES
The Uganda Revenue Authority has pledged more
cooperation with the African Tax Administration
Forum to address taxation avoidance practices
by multinational corporations.
The corporation will involve forming a Legal Counsel network that
will bring together tax administrators from across the continent
to address the issues affecting tax collection especially those
involving multinational corporations.
The Uganda Revenue Authority has pledged more cooperation
with the African Tax Administration Forum to address taxation
avoidance practices by multinational corporations.
The corporation will involve forming a Legal Counsel network that
will bring together tax administrators from across the continent
to address the issues affecting tax collection especially those
involving multinational corporations.
This article first appeared on www.ntv.co.ug 25 August 2015
African Tax HOTPOT - Issue 1 - October 2015
29
CBT COMMITTEE makes
positive strides
The Cross Border Taxation technical committee
has yielded a number of successes in a relatively
short space of time notable among them is the
revision of the first chapter of the transfer pricing
guidelines. The committee has ably defined what
constitutes financial capacity for the purposes
of allocating risk which is significant for African
subsidiaries to manage and control the key risks
and establish whether they have the financial
capacity to bear the risk.
The committee has met four times since the inception of
the group at the African Tax Administration Forum (ATAF)
Consultative Conference on New Rules of the Global Tax Agenda
held in Johannesburg, South Africa in March 2014. Plans are
underway for a fifth meeting to take place in Togo on the sidelines of the second ATAF International Conference on Tax in
Africa in October 2015.
The second chapter of the guidelines has been amended to
include new direction applicable to commodity transactions
whereby the Controlled Unrelated Party (CUP) guidance is now an
appropriate transfer pricing method for commodity transactions
between associated enterprises.
the committee
has directed
that reasonably
accurate
comparability
adjustments
should
be made
Quoted prices can now be used
under the CUP method, subject to
a number of considerations, as a
reference to determine the arm’s
length price for the controlled
commodity transaction. Furthermore,
the
committee
has
directed that reasonably accurate
comparability adjustments should
be made, when needed, to ensure
that the economically relevant
characteristics of the controlled
and uncontrolled transactions are
sufficiently comparable.
The technical committee also established a provision to prevent
taxpayers from using pricing dates in contracts that enable the
adoption of the most advantageous quoted price. The provision
allows tax authorities to determine, under certain conditions, the
shipment date (or any other date for which evidence is available)
as the pricing date for the commodity transaction.
In order to give comfort to those countries that felt that the
elective simplified approach which the report had proposed
would not lead to base-eroding payments, the committee urged
countries considering implementing the elective approach
30
African Tax HOTPOT - Issue 1 - October 2015
to do so in combination with the introduction of a threshold.
If the payments for low-value adding intra-group services
required under the approach exceed this threshold, then the tax
administrations would perform a full transfer pricing analysis
that would require evidence demonstrating the detailed benefits
received.
The importance of these changes to ATAF members varies
depending on the status of the Organisation for Economic
Co-operation and Development (OECD) Transfer Pricing
Guidelines under each country’s domestic legislation. However,
the guidelines are widely recognised as setting international
standards and best practice for countries and are relevant in a
country’s interpretation of its domestic transfer pricing rules.
It is therefore, vital that the wording in the guidelines does not
set international best practices that adversely impact on ATAF
members introducing domestic legislation that meet their
specific needs.
Given the success of the technical committee the OECD
extended its invitation for ATAF to participate in the Committee
for Fiscal Affairs meetings and to sensitise member and other
African countries on the potential impact of the BEPS outcomes;
the changes members may want to make to their domestic rules;
and the provisions to be included in the model transfer pricing
legislation for ATAF members amongst other cross border
taxation issues.
AFRICAN tax
outlook
takes shape
The African Tax Administration Forum (ATAF)
research publication, the African Tax Outlook
(ATO) has moved a gear up with data collectors
from at least 15 countries providing meaningful
material on improving tax administration and
revenue performance through informed fiscal
planning, forecasting and decision-making, as
well as cross-country and regional comparisons
for benchmarking in Africa tax administration.
The ATAF Secretariat has appointed an ATO team comprising of a
senior economist with international exposure and an economist
with data collection experience who was seconded from the
Uganda Revenue Authority. A media and communications advisor
has also joined the team to assist with providing journalistic
reviews of the material provided so that it is well understood by
all stakeholders. The communication advisor will also ensure
that the ATO publication is made available on an interactive and
social media.
An ATO capacity building workshop for data collectors which
was hosted on 27 and 28 July 2015 was aimed at establishing
a common understanding of the structure, the themes and the
indicators used as well as the excel data template and guide
book for the ATO publication. The data collectors agreed that
they should firstly ensure that they should take ownership of
data collection and liaise closely with the ATAF ATO team. The
data collectors resolved to collate, check and validate the data
provided using the agreed data template, examples and guides.
Following up on the ATO capacity building workshop, the ATO
team agreed that it would be vital that the Head of Research,
Strategy and Planning, Heads of Tax Policy Units, Directors
of Tax Statistics and Revenue Forecasting of the 15 groundbreaking countries validate and sign off the data provided as a
guarantee the data provided is reliable and auditable.
The ATO publication is set to be made available in English, French
and Portuguese once the ideal name is confirmed, a definitive
logo is produced and data collectors continue to support the
issue with material for publication.
African Tax HOTPOT - Issue 1 - October 2015
31
Innovation
Awards:
a major
highlight
in Lome
The African Tax Administration Forum (ATAF) is
set to present its inaugural Innovation Awards
in Lome, Togo during the second International
Conference on Tax in Africa to be held from
20-23 October 2015. The awards are aimed at
promoting excellence and facilitating sharing
of outstanding initiatives among African tax
administrations.
Taxpayer
Services
32
The awards, which will be with respect to activities substantially
undertaken or completed between January 2014 and June 2015,
will fall under three categories namely Taxpayer Services, Staff
Development and Revenue Collection Initiatives.
The selection criteria will focus on originality and applicability in the
African context while initiatives aimed at supporting the key objective
of domestic resource mobilisation will be recognised. Winners will
walk away with a trophy and certificate.
Staff
Development
African Tax HOTPOT - Issue 1 - October 2015
Revenue
Collection
Initiatives
89%
The online training programme on tax treaties which was held
between 20 April and 29 June 2015 has started bearing fruit
with a total of 89 students out of the 100 who registered for the
examination getting at least 60% or more.
PASS TAX
TREATIES
There were 79 registered students from
English speaking countries and 21
students from French speaking countries.
A total of 70 students passed in the former
while a total of 19 students passed in the
latter. The scores attained ranged from six
percent to 100%.
course
The youngest member in the class, Mrs
Hansha Naiken from Seychelles, scooped
top honours as she bagged all the available
marks. The high calibre of participants
however ensured that excellent results
were obtained with 33% of the students
scoring more than 90%.
online
The 89 students who passed, 67 attended
the face-to-face intermediate course which
was held in Pretoria, South Africa from 1728 August 2015. The intermediate seminar
on tax treaties is a progressive session
that follows the completion of the online
course. The two courses are introductory
and are aimed at creating awareness and
understanding of tax treaties interpretation
and application, essential for today’s tax
official in revenue administrations.
The objective of the seminar was to
provide participants with a common
understanding of the basic issues of
international taxation contained in
existing international model conventions
and those who will pass the intermediate
course will be invited for the advanced
course on tax treaties.
African Tax HOTPOT - Issue 1 - October 2015
33
NEW WEBSITE
roars into life
The new ATAF website
www.ataftax.org has been
hailed as modern, interactive
and user-friendly. Members
who spoke to ATAF about
the website were proud to be
associated with the newly
redesigned website that has
been crafted to reflect what
they need.
“The new website is refreshing and
friendly to the eye. It reflects the ideal
profile of what ATAF is all about,” said
Ms Celine Nsabimana, the Burundi ATAF
Country Correspondent.
The website makes research on tax issues
a very easy tasks and it is now extremely
convenient to find information of other
member countries at the click of a button,”
said Ms Anne Maina from Kenya Revenue
Authority who recently completed an
Executive Master’s in Taxation degree
under the auspices of ATAF.
The new look website is designed to meet
current industry standards based on the
latest and most relevant technologies
as well as integrating with all relevant
third party services such as registration
and payment systems, including social
media; Twitter, Facebook and Flickr. It has
already began addressing future needs
with the objective of providing a website
that is engaging, relevant and easy to use.
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African Tax HOTPOT - Issue 1 - October 2015
The platform offers streamlined menus,
simple navigation and access to the
information that one needs, any time of
day and it has been the aim of the design
to link information without confusing
the browser. By grouping content into
more logical sections such as ATAF
training programs and ATAF conferences
and events, the endeavour has been
to create an environment that will not
only be intuitive for use but also leads
to new discoveries of information and
content that is relevant for to members.
Additionally all the relevant ATAF news
announcement and updates on the
homepage are cascaded in a convenient
and appealing manner.
When entering the website one finds the
most recent and relevant information,
pushed to the most convenient areas
for viewing pleasure. The updates are
automatically uploaded depending on the
page that one is browsing.
The website will continuously strive to
be a platform that is engaging, relevant
and easy to use, as it is developed for
ATAF business needs and as it acts
as a central point of communication
for ATAF members. All relevant ATAF
documentation and publications can be
viewed and download in an expedient and
efficient manner.
The website makes
research on tax issues
a very easy tasks and
it is now extremely
convenient to find
information of other
member countries at the
click of a button.
This central tool is set to cater for basic
communication needs and acts as a
foundation to build upon the envisioned
product from a functional perspective
that is streamlined to improve the user
experience. Many new innovations
will continue to be introduced to the
website such as integration of the
current online registration systems to
ensure that attending an ATAF event
will be but a single click of a button. All
information from agendas to visa letters
as well as history of registrations will
be easily accessible in order to quickly
allow members to update and confirm
attendance of ATAF events.
Some of the upcoming features will include a
powerful, complete, accurate yet simple search
tool which will facilitate retrieval of information
on the site about a specific subject as well as
improvement of a fully-fledge digital online
document library. Members are encouraged
to submit articles and research so that the
platform may assist in the dissemination of
that information. In time, it is hoped to feature
one of the most comprehensive African taxrelated libraries in the world.
Members are also encouraged to
bookmark the website, like ATAF on
Facebook and follow ATAF on twitter. All
feedback on user-experience is welcome.
African Tax HOTPOT - Issue 1 - October 2015
35
ICT
HIGH LEVEL
tax conference
an eye-opener
The conference was generously sponsored by world renowned
information and communication technologies (ICT) solution
service providers which include SAP, Microsoft, Techno Brain,
Inspur, CSG and Avatar-DTI among others who enjoyed the
platform of exhibiting their products directly to African tax
administration decision and policy makers. Top of the agenda
was the demonstration of how revenue administrations can keep
abreast with the movement of transactions through e-commerce.
Speaking at the official opening, ATAF Chairperson who is also
the Commissioner General of the Zimbabwe Revenue Authority
(ZIMRA) – Mr Gershem Pasi – underscored the critical role
played by ICTs in tax administrations.
Revenue
administrations
are responsible for
facilitating trade
and mobilising
resources
for our respective
governments
“Revenue administrations are
responsible for facilitating trade
and mobilising resources for
our respective governments
in order to promote national
socio-economic
development
agendas,” said Mr Pasi who also
implored tax administrations to
always move with the times and
embrace the latest technologies
in use.
“It goes without saying that
the efficiency with which we
execute our mandates, all
things being equal, is directly
related to the rate of economic growth and social development
in our respective countries. I fervently believe that harnessing
appropriate technology can indeed be the panacea in the
realisation of our goals,” he added.
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African Tax HOTPOT - Issue 1 - October 2015
In a ground-breaking event,
the African Tax Administration
Forum (ATAF) hosted the first
High Level ICT Conference on
Tax in Africa in the resort town
of Victoria Falls in Zimbabwe
from 20-22 May 2015. The
conference which was attended
by over 120 delegates from
21 African countries offered
technological solutions of
tracing tax leakages within
revenue administrations.
Mr Pasi also encouraged the delegates to
fully participate in the various sessions
of the conference and also to prescribe
solutions to challenges faced in the
various African taxation systems.
Running under the theme, “ICT in
Tax Administration Leadership,” the
conference afforded revenue administrations across the continent an
opportunity to meet with ICT experts
and share notes and insights on how
technology could be harnessed to improve
operational efficiency and enhance tax
compliance.
technology could be
harnessed to improve
operational efficiency
and enhance tax
compliance
Speaking on the same occasion, the
guest of honour Chief Secretary to
President and Cabinet of Zimbabwe – Dr
Misheck Sibanda – who was represented
by Mr Solomon Mhlanga, highlighted
how corruption, and other sub-terranian
vices such as money laundering, transfer
pricing, trade mispricing, and other tax
evasion malpractices had resulted in net
financial losses to the African continent.
“Such a situation, therefore, requires all
of us in leadership positions to focus on
modernising our public sector management systems across the board,” he said.
Among the prominent persons in
attendance at the highly-subscribed
conference was Permanent Secretary in
Zimbabwe’s Ministry of ICT and Courier
Services Engineer Sam Kundishora
including heads of tax administration
notably Mr Henry Gaperi (OTR), Mr Ken
Morris (BURS) and Mr Dumisani Masilela
(Swaziland Revenue Authority). Countries
represented by Deputy Commissions
General included; Tanzania (Mr Lusekelo
Mwaseba), Liberia (Ms Decontee- King
Sackie), and Malawi (Mrs Mbilizi Rosa).
Countries represented at the conference
included Botswana, Ghana, Gambia,
Kenya, Lesotho, Liberia, Malawi, Mauritius,
Mozambique, Niger, Rwanda, Senegal,
South Africa, Swaziland, Tanzania, Togo,
Uganda, Zambia and Zimbabwe. Also
represented at the meeting was GIZ,
Swedish Tax Agency and World Customs
Organisation among other development
partners.
African Tax HOTPOT - Issue 1 - October 2015
37
Executive
Masters
in Taxation
a powerfully
accredited degree
The African Tax Administration Forum (ATAF)
full-time Executive Master’s in Taxation (EMT)
inaugural programme in partnership with
the Deutsche Gesellschaft für Internationale
Zusammenarbeit GmbH (GIZ), the Berlin
School of Economics and Law (BSEL) and the
Johannesburg University of Witwatersrand
is set to churn out distinguished graduates
beginning 2016.
The programme attracted enquiries from 116 candidates from
across the continent. A pre-admission list of 30 candidates was
drafted by ATAF and GIZ, taking into consideration selection
criteria such as professional qualifications, quality of the transfer
project proposal, social and intercultural competences, regional
and gender balance as well as financial resources. From this
pre-selection, the BSEL selected 27 candidates for the inaugural
programme based solely on academic criteria.
The EMT programme, the first of its kind, began in Berlin, Germany
on 22 September 2014. The vison of the EMT is to be the longterm capacity development programme of choice nurturing
change agents for efficient and effective African tax systems.
Its 15-month programme is designed for tax officials, policy
makers and tax practitioners and has a multi-disciplinary
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African Tax HOTPOT - Issue 1 - October 2015
approach aimed to expose students to concepts and theories in
the subject areas of public finance, tax legislation and applied
tax policy and tax administration.
With a strong African and global focus, the EMT takes into
account both strategic and operational aspects. Students carry
out their studies in Germany at the Berlin School of Economics
and Law (BSEL) and in South Africa at the University of the
Witwatersrand, which has longstanding cooperation with BSEL.
The course incorporates visits to top public finance institutions
such as the German Federal Ministry of Finance, the German Tax
office and the EU Commission. In South Africa, students visit the
ATAF Secretariat and the South African Revenue Service, both
based in Pretoria.
The highlight of this powerfully accredited programme is the
Transfer Project. It forms an essential part of the students’
practical learning experience throughout the degree, as it
encourages critical thinking and builds the bridge between
academic knowledge and project-based application. The transfer
project addresses a practice-oriented problem drawn from the
student’s current workplace and linked to the broader content of
the master’s programme.
Students write a short dissertation on the transfer project, which
may subsequently feed into the master’s thesis and is supervised
by BSEL academic staff and mentored by tax professionals from
the student’s workplace or country.
Outstanding transfer projects/ master’s theses are published in
the African Tax Research Network (ATRN) peer-reviewed workingpaper series. Additionally, ATAF is scheduled to recognise and
award outstanding transfer projects through awards ceremonies
at high-level ATAF events and conferences in the presence of
eminent tax officials and policy-makers.
ATAF and GIZ strongly encourages the implementation of highquality transfer projects within the broad tax administrations’
Reform and Modernisation programmes.
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39