Could Cross Border Assistance address the recovery of tax claims?

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KAMPALA – “ATAF is determined to continue assisting African countries in achieving their dream of improved domestic revenue mobilisation through tax transparency and the exchange of tax information on the African continent.” Mr Ephraim Murenzi, ATAF Specialist: Exchange of Tax Information, said. 

Speaking during the first ATAF and Global Forum Joint Regional Workshop on Cross-border Assistance in Recovery of Tax Claims in Kampala, Uganda, Mr Murenzi urged African tax administrations to see the workshop as the beginning of further engagements with each other to increase revenue through cross-border cooperation and assistance.

The collection and recovery of tax claims is a critical pillar in a jurisdiction’s revenue strategy. Nonetheless, it remains a challenge for many tax administrations at both the domestic level and in a cross-border context. Therefore, this historical workshop which is a culmination of collaborative efforts that started way back in 2022 with close engagement with the Uganda Revenue Authority (URA) couldn’t have come at a better time!

URA Commissioner General Mr John R Musinguzi and the Chief guest opened the workshop appreciating the relationship between ATAF and the revenue authority. “I’m pleased that about 32 African tax administrations are present at this workshop which is a testimony to the desire by many African countries to gain the knowledge required for implementing cross-border recovery of tax claims.” The Commissioner General however, decried the low level of tax to GDP ratio in African. “We need to collect at least 20% of taxes to our GDP ratio so that we can take our citizens into the era of self-sufficiency.” He noted.

Thereafter the Global Forum’s Mr Ervice TCHOUATA - Senior Tax Policy Advisor - stressed the importance of fighting illicit financial flows through the exchange of information, saying “we need to keep strengthening the exchange of information framework to enhance administrative capabilities so that administrations are well equipped to use these tools.”

Workshop participants were introduced to the concept of the legal and operational frameworks in cross-border assistance in recovery of tax claims. Additionally, they learned about practical experience and case studies of countries such as Belgium, Senegal, South Africa, and Uganda which have fairly advanced systems with regard to cross-border assistance.

As the three-day event came to an end, Mr Murenzi urged the tax administrations to use the knowledge acquired through the workshop and start work on cross-border assistance in recovery of tax claims. He emphasised the importance of international legal instruments as a basis for implementation of cross-border assistance.

The recovery of taxes and offshore assets kept abroad continues to be a monumental challenge to many African tax administrations, therefore both ATAF and the Global Forum acknowledge that efforts by tax administrations to enforce domestic tax laws and recover relevant taxes cannot bear fruits unless there’s enhanced cooperation through exchange of information.

READ MORE: African Countries Must Work Together to Stop Cross-Border Tax Evasion