Tax authorities brace for con­ti­nen­tal ind­aba

Chronicle (Zimbabwe) - - Business Chronicle - Busi­ness Reporter

SOUTH Africa is set to host this year’s edi­tion of the African Tax Ad­min­is­tra­tion Fo­rum (Ataf) Gen­eral Assem­bly where the con­ti­nent’s heads of tax ad­min­is­tra­tions will meet to map out ways of op­ti­mally us­ing Africa’s un­tapped tax base.

Sched­uled for Oc­to­ber 3-7 in Dur­ban, the con­fer­ence will run un­der the theme: “Har­ness­ing the African Cash Econ­omy: Con­tribut­ing to­wards Expansion of the African Tax Base.”

Zim­babwe is chair­ing the Ataf coun­cil, deputised by Sene­gal. Ataf me­dia and com­mu­ni­ca­tions of­fi­cer Mr Taun­gana Ndoro re­ported that the in­for­mal sec­tor, which uses un­recorded cash trans­ac­tions, has prej­u­diced the African econ­omy at least 38 per­cent of its Gross Do­mes­tic Prod­uct.

A key out­come of the con­fer­ence, he said, will be lay­ing the foun­da­tion for de­vel­op­ment of ac­tion plans to be pur­sued by African tax ad­min­is­tra­tions un­til the next gen­eral assem­bly in 2018.

Mr Ndoro is the chief of cor­po­rate com­mu­ni­ca­tions at the coun­try’s tax au­thor­ity, the Zim­babwe Rev­enue Au­thor­ity.

“At least 38 African states and de­vel­op­ment part­ners in the in­ter­na­tional com­mu­nity are ex­pected to con­verge for dis­cus­sions aimed at un­der­stand­ing un­der­ly­ing as­pects, rea­sons and con­se­quences of the cash econ­omy, and its im­pli­ca­tions for tax rev­enues, tax bur­den as well as rev­enue fore­gone due to non­com­pli­ance with tax laws,” he said.

“The tax ind­aba will fo­cus on pro­vid­ing prac­ti­cal so­lu­tions in deal­ing with a cash econ­omy in or­der to broaden the tax base in Africa in a bid to max­imise rev­enues within the cur­rent cash en­vi­ron­ment as well as en­cour­age mi­gra­tion to the non-for­mal econ­omy such as e-wal­let and both mo­bile phone and in­ter­net bank­ing.”

A cash econ­omy is where goods and ser­vices are sub­stan­tially paid for in cash and where trans­ac­tions are gen­er­ally un­recorded mak­ing it ex­tremely dif­fi­cult for po­ten­tial rev­enue to be har­nessed into the tax net.

Com­ment­ing on the con­fer­ence, Lo­gan Wort, the Ex­ec­u­tive Sec­re­tary of ATAF said: “It’s widely be­lieved that the African tax base is yet to be op­ti­mally ex­plored. This is partly due to non-con­tri­bu­tion of a fair share of taxes by cash economies in Africa.

“Al­though ef­forts are be­ing made to close the tax gap through var­i­ous ini­tia­tives aimed at the multi­na­tional en­ter­prises and cross bor­der trans­ac­tions, cash economies in Africa pose base ero­sion threats that have not been ad­e­quately ad­dressed.”

The con­fer­ence, he said, would pro­vide an ideal op­por­tu­nity for the ex­change of views in an­tic­i­pa­tion of spe­cial at­ten­tion be­ing given to the cash sec­tor of the econ­omy.

He added that ad­min­is­tra­tions would have an op­por­tu­nity to share ex­pe­ri­ences, which would col­lec­tively pro­vide a sound ba­sis for ap­pro­pri­ate re­me­dial ac­tion plan such as for in­stance, the im­ple­men­ta­tion of dig­i­tal­i­sa­tion of trans­ac­tions.

Re­ports es­ti­mate that on av­er­age the size of the in­for­mal econ­omy in Africa (in per­cent­age of GDP) was 42 per­cent for the years 1999-2000. Zim­babwe (at 59,4 per­cent), Tan­za­nia (58,3 per­cent) and Nige­ria (57,9 per­cent) have the largest in­for­mal economies on the con­ti­nent.

Newspapers in English

Newspapers from Zimbabwe

© PressReader. All rights reserved.