Building the Capacity of African Countries to enhance Exchange of Information

In the context of ATAF’s expanding activities on the continent and following the founding of the first two technical committees on cross-border taxation and VAT respectively, a third technical committee on Exchange of Information was formed in October 2017. The heads of the designated offices of Exchange of Information from Cameroon, Ghana, Uganda, Senegal, Seychelles, and Togo, met in Pretoria, South Africa, on 18 and 19 October 2017, under the guidance of the ATAF Secretariat.


 

In a globalised world and as African economies grow within this global framework, cross-border transactions are now a common feature of business. The purchase of goods and services across various jurisdictions has encouraged economic growth while posing some new challenges for governments, particularly when taxing these goods and services. It is essential to consider that taxpayers can be resident in one country but conduct business in another. For revenue administrations, it is important to verify the activities of such companies by checking their information of business activities in another country. This is commonly referred to as Exchange of Information or simply EOI.

In fact, EOI is the most important aspect of a tax administration’s arsenal when auditing companies that conduct business across multiple jurisdictions. Its importance is underscored by the fact that audit teams, particularly those dealing with transfer pricing cases, will often refer additional questions of information on the taxpayer to the Exchange of Information Units. These units are responsible for requesting, sending, receiving, analysing information all through what is known as a Competent Authority who is the designated exclusively to make such requests.

The formation of this EOI committee was born out of the need for African tax authorities to get up to speed with important recent work. Amongst these is the Global Forum on Transparency and Exchange of Information for Tax Purposes. This structure has been unanimously accepted by the international community to roll out a action plan that seeks to bring member states up to speed. Because the EOI committee will be tasked to represent ATAF at international gatherings, ATAF has created a network of experts on Exchange of Information in an African and global context.

Mrs Irène Bashabe from the Uganda Revenue Authority was elected as Chairperson and Mr Abdou Ben J. Sambou from the General Directorate for Taxes and Domains in Senegal was elected Vice-Chairperson.

Because of the importance of this work for the revenue administrations and the challenge African countries face where information is scarce and treaties are equally few, ATAF will train selected individuals from six revenue administrations across the continent. The experts from Cameroon, Ghana, Senegal, Seychelles, Togo, Uganda have been selected to receive in-depth training of Exchange of Information systems, processes, legislative requirements and aligning with international standards.

This also entails, at operational level, equipping civil servants from African tax authorities with the skills to allow them to gain the technical capabilities which will enable them to receive and process requests for administrative assistance. Importantly, they should also be able to draft and submit good quality applications for the exclusive benefit of their respective tax authorities.

Critical analysis of the situation of EOI in Africa reveals the need to put in place capacity-building programmes in addition to continuous training programmes. Work conducted by the international community in the areas of fiscal transparency and exchange of information are intrinsically dynamic and scalable.

To this end, the ATAF Secretariat has already established a work calendar for 2018, which includes training sessions for the attention of ATAF Membership, relating to the review of the legal and institutional frameworks, technical assistance, and study tours, in countries that already have experience with automatic Exchange of Information.

Through this work plan, ATAF will actively participate in the fight for transparency and in combating international tax avoidance and evasion, which have become complex and multi-facetted, and the cause of much damage to African countries’ tax revenue.

[For more information on ATAF & EOI, click here.]

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