"Domestic Resource Mobilisation: Accelerating Technology for African Tax Administrations"
OUTCOME STATEMENT
03-05 NOVEMBER 2021
1. The 5th International Conference on Tax in Africa (ICTA) took place virtually from the 3rd to 5th November 2021 under the theme, "Domestic Resource Mobilisation: Accelerating Technology for African Tax Administrations". The webinar drew over 500 participants worldwide, primarily from revenue administrations, ministries of Finance, International Organisations in the tax area, development partners, IT experts and members of the Academia, among others.
2. In their opening remarks the ATAF Council Chairman and Commissioner General of the Office Togolaise de Recettes (OTR), Mr Phillipe Koukou Tchodie; together with the Executive Secretary (ES) of ATAF, Mr Logan Wort, and the keynote speaker Professor Kevin Urama Chief Economist and Vice President for Economic Governance and Knowledge Management Complex at the African Development Bank (AfDB) reiterated the adoption of technology can accelerate Domestic Resource Mobilisation:
- Mr Wort highlighted that based on ATAF's research, those revenue authorities that already had or swiftly moved to digital platforms were able to navigate the impact of the COVID-19 pandemic on their operations. Additionally, stating that digitalisation will have a key role to play in the African Continental Free Trade Area (AfCFTA) which has the potential to boost intra-African trade by about 15% to 20%; he informed participants that since digitisation is a key enabler going forward ATAF's direction in the new decade would focus on this support to RA's, while also allocating more attention to Customs and Trade issues. He, however, bemoaned the low representation of women in ICT and called for an inclusive approach towards financing for the Sustainable Development Goals while emphasising the importance of the ATAF Women in Tax Network (AWITN) in addressing this gap
- Mr. Philippe Tchodie expressed full support for the ATAF areas of focus,including the digitalisation of revenue administrations, recognizing the importance of improving taxpayer service and boosting voluntary compliance. The ATAF Chair advocated that the establishment of modern and efficient tax regimes, to maximize collection, must be based on the principles of transparency, equity, inclusion, and social justice.
- In delivering his keynote address, Professor Kevin Urama stressed the importance digitalisation for effective service delivery, observing that as countries are grappling with the impact of COVID-19, development that relies on external help is fragile. He touched on several constraints to revenue mobilization in Africa such as a large informal sector, narrow tax base, low rate and volatile gross domestic savings, and endemic corruption, while stressing that Countries therefore need to turn to explore how digitization and data systems can broaden the tax base such as informal sector which accounts for over 84 percent of labour force in Africa.
3. The conference explored innovation in technology, data and risk management towards more efficient and effective administrations, use of new technologies like blockchain and heard from tax adminitratiions on their choice of technology and how it forms part of their organisation’s strategy.
4. Participants agreed that automation of and integration with the banking sector and other government departments contribute to improved and greater transparency of transactions in the banking sector and improved the ease of doing business. Modernisation should be geared at improving communication networks, connecting systems to one central place, and improving internal efficiency allowing tax administrations to leverage big data resulting from systems.
5. Participants were also given insights into the practical aspects of managing and monitoring tax declarations using technology and their impact on tax compliance. Delegates agreed that risk management strategies should be cascaded from top management level down to business units; the use of automated 3rd party information and having accurate and up to date information is the key to optimising the effectiveness of risk management, and effective risk mitigation requires having a detailed understanding of business risks, and that human resource constraints can be mitigated through the use of well-designed risk management processes to identify, prioritise and address the highest risks.
6. The conference highlighted the recent shift in global disruptive technologies that have shaped the operations of some public sector organisations, especially tax administrations, over the last decade. Specifically, how Big Data plays a vital role in the digital enterprise transformation of African tax administrations by highlighting current success stories in developed economies and how some of these can be benchmarked and implemented across the African continent with resounding sustainable results.
7. Delegates were taken through several presentations on how revenue authorities such as:
- In Zambia the Zambia Revenue Authority (ZRA), have managed to transform old systems into modern electronic payment systems, with significant benefits for both the taxpayer and the tax administration.
- The Integrated Tax Administration System (ITAS) of the Mauritius Revenue Authority (MRA) expounded on the administrative and compliance efficiency gains from using technology to integrate tax and customs. It showed that the MRA benefited in the form of streamlined administrative and compliance processes, simplification and flexibility with 99% eFiling in 2020 and almost 100% eFiling in 2021.
- The Kenyan Revenue Authority (KRA) stated that the VAA was implemented to address over declaration of input taxes, under declaration of sales, taxpayer identity theft and "Missing trader" tax evasion scheme improving matching input tax invoice declarations from 28% in January 2018 to 42% in January 2019 and 55% in September 2021.
- The Integrated Tax Management System of the Angola Tax Administration (AGT) the introduction of the system positively transforming the reality of all economic agents, providing an increase in non-oil tax revenue and generating significant savings for the Angolan State, with major benefits for citizens and companies.
8. Participants acknowledged ATAF as a strategic partner in this Technological Tax modernisation process through its technical assistance programmes. These programmes have been able to bring revenue administrations in line with technological advances. The conference also looked at the uptake of ICT systems, particularly systems that are designed for African revenue administrations. In this regard, the ATAF ICT Guidebook was presented, which looks at the uniqueness of the African countries which requires ICT systems that suit well in their unique environment.
9. Participants welcomed the role of ATAF in the development of an IT tax system for African countries. ATAF has undertaken to develop an African ICT tax system that is homegrown - envisaging taxation becoming a seamless and frictionless process. This transformation will bring together tax administrations with the rest of the government, private sector stakeholders and internationally.
10. Delegates reiterated the importance of clear leadership and common vision in the digitalisation journey of tax administrations which will also include context analysis that involves mapping the status and possibly important future changes of internal and external factors to ensure that the digitalisation strategy is agile, coordinated, focused on end-to-end benefits and can shape the future. The delegates further disclosed that tax administrations could benefit from the experience of other tax administrations, viewpoints, tools, frameworks, and technical assistance of regional and international organisations. Delegates sought the support of ATAF in capacity building in ICT development, facilitation of peer learning and support on ICT development and sharing of best practices in various areas of tax administration digitalisation.
11. Participants agreed that technology would drive our future and that all require the right policies, intentional investments, and buy-in of us to proceed. The conference resolved that ATAF is will develop an IT Tax System for Africa. Mr Wort also mentioned that through the next decade, ATAF will prioritize the investment of digital system as these have been proven to assist in modernisation and efficiency in the collection revenue.
