Tanzanian VP urges African countries to scale up collaboration in tax administration

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Tax
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Tanzanian Vice President Philip Mpango on Tuesday urged African countries to scale up collaboration in developing and managing ICT tools in tax administration.

“The current stand-alone arrangement is costly and has been a cause of concern for both governments and taxpayers,” said Mpango, while opening the 8th African Tax Research Network Congress in Dar es Salaam, the commercial hub of Tanzania.

“As you navigate on the digital technology, try to find out best ways that countries in the region with support from homegrown solutions, could scale up collaboration in developing and managing ICT tools in tax administration to among others enjoy economies of scale and sharing of information,” he told tax administrators attending the congress organized by the African Tax Administration Forum (ATAF) in collaboration with the Tanzania Revenue Authority (TRA).

Mpango urged participants to deliberate on innovative solutions to mounting risks of transfer pricing, profit shifting and illicit financial flows, suggesting that the congress should address measures to problems of asymmetric information which hinders most countries in the region from effectively tax e-businesses, carbon credit trade, natural resources value chain and tourism activities which are dominated by package tour arrangements.

He said the African continent was reeling from the economic fallout resulting from the disruptions in global supply chains caused by tightening global financing conditions, dwindling overseas development assistance (ODAs), soaring debt, and negative effects of climate change.

The adverse effects from these shocks culminated in sluggish recovery in the continent’s real growth in gross domestic product, he told participants of the congress from more than 30 African countries.

Mwigulu Nchemba, Tanzania’s minister for Finance, said Africa is endowed with abundant natural resources that can serve as a catalyst for economic growth and development. “However, to fully realize the potential of these resources, it is crucial to implement effective taxation policies that promote transparency, accountability, and fair revenue distribution by levying appropriate taxes on extractive industries,” said Nchemba.

He said governments can generate substantial revenues that can be invested in vital sectors such as education, healthcare, infrastructure, and social welfare programs.

Alphayo Kidata, the TRA commissioner general, said the congress was aimed at providing a platform for in-depth discussions of the key issues such as tax evasion and illicit financial flows, tax base erosion and profit shifting, and other tax administration challenges that surround the taxation arena in Africa.

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