FINLAND PARTNERS WITH ATAF IN A NEW PROGRAMME TO STRENGTHEN TAX SYSTEMS IN AFRICA
African Tax Administration Forum • June 23, 2020
The African Tax Administration Forum has signed a new three-year 2.1 million Euro agreement with Finland. The funding was announced at the launch of the Taxation for Development Action Programme by the Finnish Government on June 8, 2020. ATAF Executive Secretary Logan Wort, who took part in the launch virtually, said the programme was aligned to ATAF’s objectives of mobilising domestic resources for development, fair taxation and championing Africa’s interests in international negotiations on tax matters.
Mr Wort welcomed the fact that, despite the constraints due to the COVID 19 pandemic, Finland is doubling its funding aimed capacitating the tax systems of developing countries. He said that Finland has always been a staunch supporter of ATAF and under the new programme this cooperation will be strengthened even further.
Launching the programme, Finland's Minister for Development Cooperation and Foreign Trade, Ville Skinnari, explained that the Taxation for Development Action Programme for 2020-2023 has three main pillars:
- Strengthening the taxation capacity of developing countries
- Ensuring the tax responsibility and transparency of companies that receive development cooperation funds
- Improving the position of developing countries in global tax policy
Mr Skinnari said it was more important than ever to promote sustainable development in all countries and to promote social and economic justice. The best way of doing this was to promote the use of domestic resources for development through taxation and fiscal policy, and by working to stop aggressive tax and illicit financial flows. The focus of the programme was on Africa.
“Because of illicit financial flows and aggressive tax planning, developing countries lose more in tax revenue than they receive in development aid each year. African countries are now taking action to stop these flows and Finland wants to support them in the effort,” he added.
The EU Commissioner for Development and Global Partnerships, Ms Jutta Urpilainen, endorsed these points in her speech, and added that in the wake of the COVID 19 pandemic, debt relief was another important measure in support of development in poorer countries that should be considered.
In his address to the meeting, Mr Wort said European countries must be actively encouraged not to seek incentives such as tax holidays when investing in Africa as these erode the tax base. He also called for African voices to be listened to and given support in the standard-setting processes on global tax rules. “The Inclusive Framework should listen to the African voice and allow for information to be available that would help tax MNEs in Africa,” he said.
Mr Wort outlined the progress made by ATAF in building capacity and technical knowledge amongst its members in the past 11 years. He said technical assistance provided by ATAF has helped to build effective transfer pricing regimes in member countries and work to improve the exchange of information networks in Africa and to improve the fiscal regimes for the African extractives and commodities sector. “We have been very successful in putting in place the building blocks for more effective tax regimes in African countries,” he added.
In the wake of the COVID 19 pandemic, which has had a severe impact on economies in the world, including Africa, tax policymakers will need to consider how to assess and achieve the right balance between tax policy measures to attract investment and help rebuild existing businesses with the need to raise revenue to fund the economic stimulus packages implemented to respond to the immediate impact of the pandemic and its aftermath, he said.
He welcomed Finland’s commitment to ATAF’s work and to promoting fair taxation in Africa. Under the new programme, Finland will expand its cooperation with ATAF, continue its cooperation with Tanzania and expand its cooperation to other African countries. It will also fund the cooperation of African civil society organisations, such as Tax Justice Network Africa, to promote the equality of taxation.
The document released by the Finnish Department of Foreign Affairs on the Tax and Development Programme states that: “By working with a trusted long-term partner such as ATAF, the experts of the Finnish Tax Administration can contribute to the improvement of taxation capacity in several African countries in a manner that is administratively easy and credible from the Finnish perspective.
“One of the activities that can be supported through ATAF is the African Tax Research Network (ATRN), in which some Finnish tax researchers have also participated. It strengthens Africa’s own capacity in this area. Further efforts will be made to encourage Finnish-African cooperation in this taxation research with such partners as the Finnish Government’s Economic Research Institute, the Finnish Tax Administration, the Helsinki-based United Nations University World Institute for Development Economics Research (UNU-Wider), and Finnish universities, “ it said.
The press release is available for download in French
and Portuguese.
The ATAF Model Tax Agreement serves as a guiding instrument to help African nations negotiate treaties that better protect their interests, ensure fair allocation of taxing rights, and enhance domestic revenue mobilisation.
CEMAC and ATAF agreed to explore practical avenues for cooperation, including technical assistance, regional training programmes, and platforms for experience exchange.
A key outcome of the training was the heightened awareness among FIRS officials of the critical role data plays in modern tax administration.
The training aimed to strengthen the capacity of tax officials to detect, investigate, and prosecute financial crimes such as tax evasion, money laundering, and illicit financial flows. It focused on practical approaches to financial crime investigation within the tax context.
Mr. Logan Wort emphasized the critical role of taxpayers in fostering economic growth and sustaining public services.
Taxation is a key aspect to increase gender equality since tax is one of the building blocks of society. In particular, it creates domestic resources which are a major source of funding for economic development and empowerment.
ATAF emphasised the importance of harmonised tax systems and advocating for revenue-generation mechanisms that would sustain government finances while fostering trade liberalisation.
ATAF is gearing up for a highly anticipated event: the ATAF Women in Tax Network Leadership Conference. Set to take place in Cape Town, South Africa, on March 5-6, 2025, this conference promises to be a pivotal moment for women in the tax and economic sectors across Africa.
The ATAF Women In Tax Network (AWITN) pledge is a commitment by various countries to adopt a focused, gender-sensitive approach to tax policy and administration.
The workshop aimed to bridge the gap between tax authorities and the media, improving the clarity and accessibility of tax-related information to foster public awareness and boost tax compliance.
