The 7th ATAF General Assembly took place in Lagos, Nigeria organised by the African Tax Administration Forum (ATAF)and was hosted by the Federal Inland Revenue Services (FIRS); in partnership with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), from the 31 October – 4 November 2022, under the theme “Rethinking Revenue Strategies: The Human Face of Taxation’. The conference attracted 498 registered delegates from 53 countries including Heads of Tax Administrations from 39 African countries; multinational organisations comprising of the African Union Commission, United Nations, World Bank Group, Organization for Economic Cooperation and Development, Intergovernmental Forum on Mining, International Budget Partnership, United Nation Programme on HIV/AIDS, International Bureau of Fiscal Documentation; regional tax organisations such as the Commonwealth Association of Tax Administrators, Inter-American Centre of Tax Administrations, Exchange and Research Centre for Leaders of Tax Administrations (CREDAF), West African Tax Administration Forum, Network of Tax Organizations (WATAF); development partners including Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Foreign, Commonwealth and Development Office (FCDO), Ford Foundation, Norwegian Agency for Development Cooperation (NORAD), African Development Bank (AfDB), Addis Tax Initiative (ATI); and members from the Academia, Civil Society organisations, and businesses.
The opening ceremony was presided over by the Governor of Lagos State represented by Chairman of the Lagos Internal Revenue Service, Ayodele Subair who delivered the official opening address; Prince Clem Agba, Minister of State for Budget and National Planning of the Federal Republic of Nigeria who gave the key note address; the Chairman of the ATAF Council and Commissioner General of Office Togolais des Recettes, Dr Phillipe Tchodie; the Executive Secretary of ATAF, Logan Wort; Muhammad Nami, the Executive Chairman of FIRS; and Winnie Byanyima, Executive Director of UNAIDS, and Under-Secretary General of the UN who was the lead speaker. The Executive Chairman of FIRS noted global challenges including among others; the socioeconomic impact of COVID 19, rising inflation and rising interest rates, the Ukraine-Russian war, the ever-increasing public debt, vagaries of nature brought about by global warming and climate change as well as the continuous outflow of Illicit financial flows from Africa. The ATAF Executive Secretary pointed out that a continent that can mobilise its resources for the improvement of the quality of lives of the people, is one with adequate socioeconomic infrastructure, good educational institutions, quality healthcare, strong institutions, good governance, peace and generally a good standard of living. The Chairman of ATAF sighted challenges specifically faced by tax administrations during the pandemic affecting the ability to collect taxes but noted that tax administrations and different organizations responded to these challenges. The Honourable Minister of State noted that digitalization and automation of tax administration such as through e-filing, e-payment systems are critical for facilitating taxpayers to comply with a range of tax laws; noting that this simplicity, enables taxpayers to meet their obligations, and affirming that this in turn capacitates states to provide public goods and services. The lead speaker, Winnie Byanyima, Executive Director of UNAIDS, and Under-Secretary General of the UN noted that it is only through an equitable and sufficient taxation that Africa can free itself and set on a journey to a sustainable future where Africans will have the opportunity they deserve. She also noted that considering the number of Africans under poverty, that African governments cannot rely on borrowing instead of reforming their tax systems as debt financing in Africa is three times the education spending, six times the health spending and twenty-two times the social spending. She stressed the need to tax the wealthy on the continent as the six richest Africans are richer 600 million of the continent's poorest.
The AU being the lead on African tax policy, and as a guest speaker, H.E Amb. Albert Muchanga, Commissioner of Economic Affairs, Trade, Tourism, Industry and Minerals of the African Union, recognized the challenges facing Africa as the ongoing Russia-Ukraine conflict which has ushered in a new era of uncertainty , bringing spill-overs at the economic level, such as inflation and looming recessions in many countries; external debt burdens that are proving to be unsustainable; the forecasted growth of 4,8% which is not enough to reduce poverty; and the negative effects of COVID-19. However, he also noted that Africa contributes only 3% to global warming, yet the impact felt by Africa and the negative effect on agriculture is massive. This requires re-thinking to determine how best to mitigate this, while collecting revenue on environmental tax to address some of the gaps caused by the effects stated, to give back to society and improve lives. The assembly acknowledged the importance of collaboration in protecting, broadening, and deepening tax bases by combatting illicit financial flows from Africa. It was also noted that in this respect, the African Union Commission, with other stakeholders, and technically supported by ATAF, has finalized two key strategies in this regard. These are the Strategy on Combating IFFs and the Tax Strategy, which were approved at the 5th Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning, and Integration held in in Lusaka, Zambia, in July 2022.
In discussing tax and development in Africa, and the need to improve conditions for domestic resource mobilization, the assembly recognized that the social contract between the government and the public must be evident through improved public services to reinforce accountability and transparency, and in the process, build public trust. The assembly also implored countries to prioritise the effective use of resources in a manner where the public can feel the positive impact of the sustainable development projects funded by tax revenues, underscoring that this will sustain confidence and belief in the social contract, and improve tax compliance with the multiplier effect of making revenue available for development financing. The participants further noted that tax morale in low-income countries is to a great extent reciprocated by what the state provides to citizens. Citizens need to perceive that state provided goods are worth their while, relative to private providers, in order to contribute to the tax system. Governments need to provide public goods fairly and efficiently and these goods must be perceived as being at least of comparable quality to equivalent private services. So, to be able to mend fractured social contract delegates suggested two key roles to be undertaken by states, namely to create more room for citizen participation and secondly to deliberately institutionalize initiatives to encourage restoration of the social contract. Delegates noted further that taxpayer’s willingness to pay tax is dependent on several factors including the perception that the government is legitimate and that it treats citizens fairly, especially the perception by taxpayers that all liable taxpayers pay their taxes. It was also agreed that Tax morale is also higher in situations where taxpayers do not pay bribes for services and trust the tax administration.
Critical towards enhanced social contract is the role of tax administration as primary interlocutors. Therefore, in relation to tax collection, it was noted that citizens’ willingness to pay tax is not only about how much services they receive from government but how they are treated by tax administration officials. The conference noted that tax has a role to play in saving the environment and creating a sustainable future using environmental taxes for the dual objective of raising DRM for the financing of sustainable development and curtailing environmentally harmful practices with consideration for peculiarities of the continent. The meeting observed that there is still limited adoption of carbon pricing on the continent and encouraged peer learning from countries that have pioneered this. It was agreed that there is growing interest in Africa for the establishment of carbon taxes and other environmental taxes, but capacity is lacking to implement them locally. A key outcome of the discussions was for ATAF to provide more technical support in helping member countries develop and implement environmental fiscal reforms whilst ensuring just transition and equity for its people. ATAF must play a key role in developing capacity for the establishment of environmental taxes and other carbon taxes capable of mobilizing novel resources to African the states. With regard to digitalisation, the conference highlighted that while digitisation allows tax administrations to optimize tax compliance and collection, it should be human centred. It also highlighted the importance of a design thinking approach that considers the needs and concerns of the various stakeholders. Participants agreed that digital solutions should take into consideration both the obligations and rights of taxpayers as well as tax administration employees. During the discussion, it was agreed that digital solutions should be an enabler for achieving the tax administration strategic objectives and voluntary compliance-based systems that save money, time, and facilitate efficiency in tax administration and compliance. On global tax systems, it was agreed that these are changing and in the new environment, the global engagements of trade and business have moved past traditional forms of governments’ abilities to collect revenues.
The “Scale without Mass” phenomenon has brought to light how companies have been able to amass large revenues and profits without a physical presence in the markets they operate in. This has posed new challenges for revenue collection by governments, especially in Africa and requires requisite policy and administration reforms to bridge this gap, a task that should be led by the AU and technically supported by ATAF and other stakeholders according to participants. Delegates also discussed the ongoing work of taxing the digitalized economy and the progress made.
Throughout the discussions, panellists reflected on the two-pillar solutions proposed by the OECD Inclusive Framework on BEPS and the introduction of Article 12B by the United Nations. Delegates also debated digital service taxes, specifically looking at the reception from taxpayers and the revenue performance. Participants expressed concern on the requirement to remove existing unilateral measures on Amount A and further noted if such removal was allowed it should be on a phased approach basis to allow countries to assess the impact of these rules on existing taxing rights. Participants agreed that ATAF should continue to support countries in the ongoing global tax discussions and continue to offer technical assistance to member countries both inside the Inclusive Framework deal and those who are not. The assembly recognized that improved human capital development and management is critical to any success in DRM. It was agreed that tax administrations put more emphasis on the improvement of integrity and ethics to mitigate corruption. It was agreed that the critical factors the tax administration should focus on, are good human capital management, internal control mechanisms, strengthened technology to support the tax system, carrying out annual taxpayers’ perception surveys, and government accountability. Delegates agreed that African countries need to re-think how they can benefit financially from their mineral resources. It was emphasized that the Future of Resource Taxation is a dedicated dialogue for governments, civil society, and industry to exchange ideas on how the current system of mining taxation can be improved, as well as alternative options available to resourcerich countries to maximize the returns from their mineral wealth.
The assembly noted that the Handbook on the Future of Resource Taxation provides solutions to be considered by mineral producing countries to receive a fair share of the financial benefits from mining to guarantee a reliable supply of critical minerals. The General Assembly also use the opportunity to convene technical experts from across the ATAF membership to deliberate on the work on the ATAF Secretariat. The technical committees focussed their work on digital aspects of cross-border transactions for VAT, the development of the ATAF Qualified Minimum Domestic Top up tax and exchange of information for crypto assets. The Heads of Research in RAs also convened to review the preliminary data for the 2022 Publication of the African Tax Outlook. In addition, the ATAF Secretariat also engaged with Donors and Development Partners to discuss the status and impact of the work on the continent and plans for the future. Importantly, the Addis Tax Initiative held a collaborative meeting during the Assembly to discuss gender equality in taxation. The Network of Tax Organisations (NTO) also held its General Assembly meeting on the margins with Logan Wort, Executive Secretary, ATAF emerging as the NTO Council Chairperson. ATAF welcomed South Sudan as its 41st member with the signing of the instrument of ratification by Dr. Patrick Mugoya, Commissioner General of the National Revenue Authority of Sudan. Lastly, the ATAF General assembly sat in a closed session presided over by the Chairperson of the ATAF Council, Dr Phillipe Tchodie, and considered among other things: The ATAF Council report 2020-2022, appreciating the extensive growth of ATAF support to the membership that has led to the assessment of tax up to USD 3 billion to-date, and to 1.3 billion in collections in just 7 countries. Considered and approved the amended ATAF Agreement which includes key expansion areas as ATAF aims to extend its services to all regions on the continent; Elected a new council to steer and lead the organisation as follows; Chairperson Togo - Philippe Koukou Tchodie Vice-Chairperson South Africa - Edward Kieswetter Members of Council Botswana - Jeanette Chanda Makgolo Burundi – Jean Claude Manirakiza Nigeria – Muhammad Nami Morocco - Younes Idrissi Kaitouni Rwanda - Pascal Bizimana Ruganintwali The Gambia – Yankuba Darbo Uganda – John Musinguzi Zambia – Dingani Banda In conclusion, the assembly expressed appreciation to FIRS and the Government of Nigeria for the great hospitality extended to all delegates at the 7th ATAF General Assembly.
