African culture has always included a system of dispute resolution, which ensures that all parties have a chance to be heard and are fairly dealt with in the process of revenue collection.
Tax Administrations/Revenue Collecting Authorities
More than any other group in the tax system, revenue collecting authorities play a frontline role. They have a major role to play?? in bringing about the desired level of tax compliance.They interface with the taxpayer and have the responsibility for developing a proper tax authority.
In times past, resentment or hostility against the government or leadership was visited or vented on the tax collector who was the face of the tax system that the taxpayer could identify.
This hasn’t changed much and it therefore places a major? responsibility on the tax authority to be a helpful face so that the resistance and resentment by taxpayers is minimised and the taxpayer is able to easily identify with the tax system and comply voluntarily.
Taxpayers and Citizens Central Focus of the Tax System
Various reasons have been adduced for taxpayer apathy and low level of tax? compliance in Africa, including the usual refrain that government? misappropriates tax revenue, so the taxpayer is justified in withholding his? contribution.?
This argument is flawed, because by not complying, the taxpayer then joins the? same government he accuses of misusing the tax revenue in undermining the tax system.
The taxpayer cannot meet government’s failure (real or perceived) with another wrong of non–compliance.Rather, he must discharge his own part of the bargain and then engage government to? discharge its own obligations and should constantly seek to partner and co-operate with government in developing a system of compliance, which only the? taxpayer can guarantee.
The taxpayer has as big a role to play as government in developing confidence in the tax system and in this regard, taxpayers, must see? themselves as part and parcel of the tax system.
International Organisations / Development Partners etc
Their previous role was limited to provision of aid and grants with limited follow up to confirm if the assistance provided has been properly utilised. International organisations have now become more directly involved in developing systems and institutions in Africa- provision of aid, capacity building, experience sharing and exchange? of personnel. These? organisations, especially those from jurisdictions with? well developed tax systems have a major role to play in assisting African tax administrations in developing a culture of tax compliance. This can be done by providing not just funding, but also by engaging with African governments to highlight the benefits of a well developed tax system.
Other international organisations, such as umbrella bodies of tax administrations can assist by providing a forum for collaboration, partnership, exchange of information and experience sharing amongst tax authorities, so that best practices can be highlighted and emulated (ATAF etc)
As highlighted in this presentation, a culture of tax compliance? is necessary, if African nations are to make the transition from perpetually developing to developed nations
In recent times, African nations have experienced growth rates comparable and in some instances higher than those of more developed economies.
Concern is whether African nations can sustain this impressive economic performance or whether they will regress.?
The answer to this, lies in part on the ability of African nations to build strong systems and institutions, which can serve as the platform for constantly delivering the required level of growth or development.
As earlier stated, no single institution holds more promise in this respect than the tax system for the various reasons highlighted above.?
The tax system in Africa if properly harnessed is capable of not just providing revenue for sustainable development in Africa, but is capable of putting up Africa as a model to be emulated.
It is with this focus that we must consider the benefits of developing an African culture of tax compliance.?
Africa holds all the potential and promise it requires to develop its people, processes, systems and institutions.
Conclusion
The challenge is whether we have the will to do so. My belief is that we do and the first step in this journey is to develop a system of compliance so unique and tailored to our needs, so that we can cater for our challenges in an increasingly sophisticated and linked global economy without ignoring our peculiar circumstances.
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