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The African Tax Administra1on Forum (“ATAF”)
Presenter: Mr. Thulani Shongwe
Venue: Lusaka, Zambia
Date: 13 February 2013
Topic: “How can improved tax administra1on contribute to investment promo1on and employment crea1on ”
Theme: Tax Incen1ves

DRIVING TOWARDS DETERMINING STRONG FISCAL POLICY
• Strong rela1onship between policy and administra1on.
• Such a rela1onship ensures that both sides of the fiscal policy understand
constraints and challenges the other may have.
• The rela1onship also develops sound economic policies and this creates
confidence in developing the fiscal policy.
• A fair and transparent system ensures that investors have good understanding of
what is required on their end in terms of doing business in a par1cular jurisdic1on.
• Joining interna1onal fora and signing onto interna1onal agreements that allow for
exchange of informa1on and ideas.
• Overall understanding of the economic landscape, growth and mineral reserves in
a jurisdic1on can determine stronger policy direc1on.
• Involving transparent processes of implemen1ng tax incen1ves through na1onal
or parliamentary debates / processes.

THE NEED FOR GOOD GOVERNANCE
Renewed
interest in
taxaFon
Reform of tax
administraFon
Reform of the
tax structure
Unstable tax
revenues
The nexus
between
taxaFon and
good
governance
The realisa1on by
African
governments that
fiscal self-­‐reliance
requires improved
tax systems
Interna1onal
debate is
encompassing on
the development of
tax policies that
tackle global issues
such as capital flight
and tax evasion
15 African countries
have established
the semi-­‐
Autonomous
Revenue
Authori1es
39 African countries
have restructured
their central tax
administra1ons
within the Ministry
of Finance with the
aim of making them
more effec1ve and
efficient
Move to semi-­autonomous
RAs
Broaden the tax
base tax payer
educa1on
The tax mix of
many African
countries is
unbalanced
meaning that many
African countries
rely excessively on
a narrow set of
taxes to generate
revenues
Taxa1on and good
governance are
being linked due to
the realiza1on that
the tax system may
contribute to
improved
governance

THE NEED FOR GOOD GOVERNANCE
• African governments recognise that revenue mobilisa1on is central to this
goal and their ambi1ons to achieve the Millennium Development Goals
(MDGs)
• Good Tax Governance (GTG) and more effec1ve tax systems are central
for sustainable development because they can:
―
―
―
mobilise the domes1c tax base as a key mechanism for developing countries
to escape aid or single resource dependency
reinforce government legi1macy through promo1ng accountability of the
government to tax-­‐paying ci1zens, effec1ve state administra1on and good
public financial management
achieve a fairer sharing of the costs and benefits of globalisa1on

DOMESTIC RESOURCE MOBILISATION
Domes1c Resource Mobiliza1on DRM refers to the genera1on of savings
from domes1c resources and their alloca1on to economically and
socially produc1ve investments.
DRM is essen1al in the advancing of Africa’s development agenda as it
allows countries to raise capital internally to finance the development of
infrastructure and rely less on aid.
Increasing the social contract between ci1zen and state. Through paying
taxes ci1zens can hold their governments accountable to their needs for
development
The stronger the rela1onship between state and ci1zens, the more
transparent governance is. this has a posi1ve spin-­‐off to FDI

GOVERNANCE AND TRANSPARENCY
Public sector/
private sector
balance
Open dialogue
between
government and
civil society
Clear and stable
laws and
regula1ons
Rule of law
Control of
corrup1on
High level of
capacity and
skills in
government
ATAF believes in promo1ng good governance
and developing revue authori1es in order to
increase the receipts of domes1c resource
mobilisa1on. The result of this is an enhanced
rela1onship between ci1zen and state and a
more accountable government that relies less
on aid and is wholly transparent to its people.
ATAF has published a Report on Good
Financial Governance working in tandem with
the African Organisa1on of Supreme Audit
Ins1tu1ons (AFROSAI) and The
Collabora1ve Africa Budget Reform
Ini1a1ve (CABRI) to give a well rounded
view of three spheres of finance
departments and their role in promo1ng
good governance.
Fiscal, monetary
and budget
discipline
ATAF has also published a Report on Good
Tax Governance in Africa.

BUILDING A CULTURE OF PAYING TAXES
• Governments should remove the percep1on of firms and individuals that paying taxes brings
them licle in return by providing quality services and infrastructure to the public and private
sector.
• The cost of dodging taxes and the risk of gedng caught must be perceived as high by
taxpayers, and penal1es must be applied when evasion is detected
• Tax administra1ons should move towards striking a balance between enforcement and a
“client-­‐orientated environment” when trea1ng tax payers.
• Well-­‐defined and well-­‐executed educa1onal campaigns by tax administra1ons using the
media and new technology can help ensuring that taxpayers understand and accept the
compliance requirements.
• A broader engagement of ci1zens, civil society organisa1ons, the business community and
the media on tax issues, including improved dialogue between these stakeholders and the
state.
• Establishing clearer links between taxes paid and service delivery to strengthen the social
fiscal contract between the state and society.
• Con1nued efforts to modernise and build the capacity of tax administra1ons.

THE EASE OF DOING BUSINESS -­‐ FINDINGS
• Administra1on that is unfair and capricious will bring the tax system into disrepute
and weaken the legi1macy of government.
• Compliance with tax laws is important to keep the system working for all and to
support the programs and services that improve lives Keep laws clear and
simple.
• Introduc1on of electronic systems and IT infrastructure Strengthens the
revenue administra1on and its modernisa1on.
• Reducing tax rates can have a posi1ve spin-­‐off for investment This should be
done through a transparent and fair taxa1on system.
• Overly complicated tax systems are associated with high evasion. High tax
compliance costs are associated with larger informal sectors, more corrup1on and
less investment
• Efficient tax administra1on can help encourage businesses to become formally
registered and the economy to grow—and thus expand the tax base and increase
tax revenues.
– Source: World Bank

ATAF’S CAPACITY DEVELOPMENT, RESEARCH AND PROJECTS
• Capacity development through technical events
– ATAF hosted 25 capacity in 13 member states
– 563 delegates acended
• The ATAF research projects aspire to develop ini1a1ves to capture African and
interna1onal best prac1ces and experiences in line with the following objec1ves:
– to enable the Organisa1on to develop targeted capacity development interven1ons that are truly
tailored to the demands, challenges and priori1es of its members;
– to empower its members to func1on efficiently, proac1vely and produc1vely; and
– to contribute to the sharing of knowledge
• Needs and Reform Priori1es of African Tax Administra1ons
– Led by Dr Nara Monkam
– Workshops have been completed and the research findings and publica1on will be launched on 18
March 2013.
• Feasibility Study on African Tax Centres
– Study indicates maximum impact would be through regional partnerships with revenue authori1es
– Brick and mortar centres are not feasible in the short-­‐term due to start-­‐up costs
• Establishment of ATAF Technical Assistance Unit (TAU)
– In support of this project, the Dutch Tax and Customs Administra1ons made two experts available
– Technical assistance facility as part of broader capacity programme
• African Tax Outlook
– General Assembly has approved the research and coordina1on of an ATAF publica1on taxa1on
across the con1nent.

CONTACT DETAILS OF THE ATAF SECRETARIAT
Mr. Thulani Shongwe
Specialist on Mul/lateral Coopera/on
: tshongwe3@sars.gov.za
: +27 12 432 9331
: www.atarax.org
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