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Cephas Makunike
cmakunike@taxjusticeafrica.net
TJN-A
Presentation Overview
SUB TOPICS
Introduction
What is tax coordination
Harnessing Regional
Cooperation
Tackling harmful tax
competition: Continental
and sub-regional Efforts
Areas of convergence
Areas of divergence and
threats
Conclusion
TAX COORDINATION IN
AFRICA
Introduction
The EU is seen in many parts of the world as
the benchmark for economic integration, and
consequently as an example of tax
coordination among sovereign states
Tax coordination is increasingly being seen as
an enabler for national governments to
collect and redistribute funds into projects
and programmes that benefit a country,
region and the continent as a whole
Examples contd
WAEMU Directives on value-added tax (VAT)
and excises introduced in 1998; and, by 2009,
the region completed a set of directives in
relation to capital income taxation
Areas of Convergence
There is a general acknowledgement of the
benefit of common approaches to taxation
with an eye toward dissemination of tax
information, capacity building, and agreements
on tax incentives that foster investment
Establishment of a Model Tax Agreement that
acts as a common policy for dealing with
international partners
Setting of minimum standards on tax structure
and design
Divergence contd
coordination framework approach broadly
based on the European Union (EU) model of
coordination, but differs from it in many
regards, including the limited powers and
resources of regional institutions
Different GDPs, inflation rates, tax capacity,
tax bases
Conclusion
Tax coordination is envisaged to:
create necessary conditions for long term
establishment of regional/ continental common
markets
facilitate legitimate business and
regional/continental trade through fair and
efficient tax regimes
to sustain and enhance African countries
domestic tax revenues on an equitable,
economically efficient basis, economically and
neutral way
Conclusion Contd
terming tax competition hence fighting the race to
the bottom and tax incentives which result in
revenue losses
succeed in converging tax systems, particularly
statutory tax rates,
contributing to improving revenue mobilisation
THE END
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