More tax leakages threaten African countries

Tax administrators in Africa have been challenged to embrace digitilisation to improve tax collection. Logan Wort, Executive Secretary of the African Tax Administration Forum (ATAF) this week implored African countries to embrace the 4th industrial revolution and get better at collecting revenue.“We need to build technologies to meet demands of digitilisation,” said Wort at ATAF 5th General Assembly in Gaborone. He said unless the continent moves fast to make new rules to support tax collection in the rapidly digitalizing globe, more leakages are to be suffered by African countries, already tormented by either tax avoidance and evasion. Wort said digitilisation is revolutionising cross-border trade, while free trade zone initiatives are also threatening taxes usually collected by governments.Citing tourism industry, Wort said the continent’s safari may in the future not benefit local economies but host countries of companies that operate tourism outfits in Africa. He said a company may operate a safari venture in Africa while based overseas, meaning all bookings and reservation will be done through the host country with little trickling down to the safari destination. ATAF with 38 countries that have been members of the continent’s premier tax body over the past nine years envisage getting vibrant solution to challenges the continent face on tax. Tunde Fowler, ATAF Council chairman said it is critical for the continent to swiftly move and ensure its tax legislation and system are improved to meet the global standards. “While the developed world was fine tuning the tax sector, we were busy selling our resources,” Tunde, added that if Africa does not improve her tax laws in the digital global, more revenue collection losses will be incurred.