Civil society’s organizations in Africa have been
warned not to leave the issue of tax administration in the hands of the
governments alone; instead they should form parallel institutions to monitor
the same. It has revealed.
This call was made recently in Dar es Salaam during
an International Training in Tax Administration.
The training to representatives of civil societies
drew attendants being trainers and other participants from East Africa, West
Africa and Southern Africa.
In the workshop that was convened by the Policy
Forum NGO. It was learnt that tax collection is turned into a political weapon
by many African countries Tanzania inclusive.
It was learnt that the political oligarchy tend to
muzzle through tax collection the commercial people who are contrally to their
tastes and they tend to give offers in various forms like havens, holidays, and
exemptions those in their favour.
But this nasty game which has long term calculated
moves to evade tax involves the multinational companies no wonder there are
changes of names and ownership in some big companies in order to evade capital
gain tax.
For instance in Tanzania there have been such
changes with Serena Hotel which previously had various names from Sheraton, to
Royal Palm, Moven Pick and now Serena.
In mobile phone companies there have been changes of
names with Celtel, Zain and now Airtel just like it was with Mobitel, Buzz and
now Tigo.
It was with such changes that the civil society and
investigative journalists were counseled to investigate the motives behind such
changes.
During his opening remarks the Policy Forum (PF)
Coordinator Semkae Kilonzo said that tax administration has caused a lot of
problems in African countries.
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| Paul R.K Mashauri (first left), President, EASB in a thoughtful discussion with mr. Semkae Kilonzo, Executive Director, Policy Forum (second left), Hon. Mohammed Dewji (MP), second right and Mr. Rakesh Rajani, first right |
This is due to evasions which are manipulated
through various corrupt means. He delineated that a lot of revenues are left
untapped and therefore denying people adequate services.
“If taxes are not collected properly it means some
of the Government’s revenues are left outside and hence denying the people
income through services which are essential,” he commented.
He added that it was the duty of the civil society
to ensure that reports are published and there is transparency on who should to
pay what.
“The tax regime is poor in Tanzania and many other
African countries because the whole issue has been left to the civil servants
hence corruption and capital fight out of Africa have become common
phenomenon,” he added.
Jack Ranguma a tax expert from Kenya said that he
has conducted a lot of researches just to find that proper collection of taxes
can be effective if various community groups are involved in the monitoring
programmes.
Ranguma who is former Commissioner of Kenya Revenue
Authority is currently working as a consultant with the Kenyan Tax Research
Institute.
He mentioned such groups as parliamentary groups,
villagers, and distribution functionaries with the aim of ensuring that there
is justice in tax administration and that there is enough capacity building in
order to create awareness.
“If people are reluctant to pay tax then it means
that they do not see the direct benefit of paying taxes to their government and
this is a reflection that either tax rates are too high, or the tax authorities
are weak,” he commented.
Ranguma said that the main problem with developing
countries like Tanzania is the fact that they give priority to the expenditure
side than to the income generation one.
He challenged that this trend eventually deprives some
important projects like hospitals, schools, infrastructures and hence leading
to the vicious cycle of poverty.
He further explained that once there is proper
collection of taxes there will be stable economy of a country. He warned that
without this stability the rich tend to manipulate the economy much to their
advantage.
“I am convinced that Africa, and other poor
countries need to discuss with the International Monetary Fund (IMF) and the
Organisation for Economic Co-operation and Development (OECD) more seriously,
and constructively for both sides,” he commented.
The tax expert also argued that the failure to
monitor social security funds and pensions which are other forms of tax, denies
the weaker equity while at the same time these are more beneficial to the high
ranking officials.
“Even social security fund is a tax but in a
different name, that is why there are a lot of political involvements in these
funds. These are meant for re-investment while other employees pay for the
retirees,” he added.
Vituz Azeem who presented a paper on the link
between tax justice and development said that tax is meant to support
development, and if there is poor collection of the same this will be reflected
in the national budget.
He warned that many African countries fall prey of
corrupt officials in the customs and excises to the extent that big amounts are
pocketed to their personal accounts than to the governments.
“Tax administration needs a lot of ethics, if you
are working with the tax authority you need to declare your property, also
these workers need to report their properties periodically,” he cautioned.
On the issue of tax leakages was Savior Mwambwa who
presented a paper on the role of multinationals in tax exemptions, competition,
and capital flight.
He said that exemptions are always issued in the
pretext of attracting more foreign direct investments, reducing poverty and
creation of jobs as well as to allow big growth of the economy.
But in many cases these exemptions are issued
through ill motives. However he warned that a good number of such exemptions in
various names be it haven, holidays etc, are doing harm to Africa economies
than good.
“In many cases tax exemptions is just a creation of
a room for corruption, there is a need to create independent body for scrutiny
and independent prosecutors who can handle the matters in the court,” he
counseled.
Dereje Alemayehu presented a paper on how to
mobilize domestic resources in order to avoid dependency. He counseled that
citizens must be induced to like payment of tax because in many cases a good
number of people do not like payment of such.
“If citizens realize that there is a value for their
money they will just be attracted to pay without any kind of harassments or
intimidations,” he commented.
Alemayehu mentioned that there are four measures to
make people tax willingly; to make state income transparent, to make equity in
the provision of services, and minimize the externalization of costs.
Another method is to give voice to the citizenry in
regard to public expenditures, on how incomes are generated and spent.
On his side Michael Otieno from the Kenya’s National
Taxpayers Association (NTA) said that there is a need for the civil society to
institutionalize mechanisms of verifying how tax is collected and spent in a
country.
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| National Taxpayers Association Coordinator-Michael Otieno |
He counseled that through civil society advocacy
people must understand that paying tax is amoral obligation and duty which has
benefit to their lives.
END
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