African authorities strive to reduce tax leakages

African tax bodies will mark the 10th anniversary of their umbrella organization, the African Tax Administration Forum (ATAF), in their efforts to reduce tax leakages.

A total of 38 African countries are members of the ATAF, making the organization Africa’s largest body that collectively deals with global tax issues affecting the continent.

The organization was born out of a concern as the 2008 global crisis might affect the financial aid provided by developed countries, Stella Nyapendi, Uganda’s representative of the ATAT, told reporters here Thursday.

The ATAF has provided tax advisory services to its members, and has helped build the capacity of its members to reduce tax leakages, according to Nyapendi.

The ATAF collaborates with institutions like the United Nations Economic Commission for Africa, the High-Level Panel of Illicit Financial Flows (IFF), and Tax Justice Network, Nyapendi said.

“These collaborations are aimed at countering abusive tax practices by multinational enterprises and combating of the IFF from the continent,” she said.

Africa now has the capacity to formulate its own tax laws and regulations without necessarily relying on external organizations, according to Vincent Seruma, assistance commissioner for public and corporate affairs at Uganda Revenue Authority, Uganda’s tax body.

Seruma told reporters here on Thursday that some external organizations have prescriptions of “one size fits all” and yet now African countries can design country-specific solutions.

“For technical assistance and expertise, we majorly relied on the International Monetary Fund, the Organization for Economic Cooperation and Development and other jurisdiction,” Seruma said.

“Every time you depend on another jurisdiction for technical support, you are likely to dance to their tunes … But here, you have an option of collaborating with African countries, which is much easier,” he added.

Nyapendi said the ATAF has put in place a committee which will assess some challenges and give solutions on how to tax the digital economy.

Uganda also introduced a social media tax as one of the ways to tax people who transact through social media, she said, adding that Uganda is also revising its Double Taxation Agreements with other countries to clarify ways of taxing the digital economy.