The African Tax Administration Forum (ATAF) on Wednesday urged more African states to sign agreements on avoiding double taxation among themselves to boost revenues.

“We are advocating for more intra-Africa tax treaties because they often have information exchange components that makes it legal for countries to investigate cross-border tax fraud that leads to loss of tax revenue,” ATAF Executive Secretary Logan Wort said in Nairobi during the Fifth Pan African Conference on Illicit Financial Flows and Tax.

According to the pan Africa tax organization, there are fewer than 30 tax agreements between African states. African countries, on the other hand, have signed approximately 300 tax treaties with states outside the continent.

Nigeria, South Africa and Mauritius have most tax treaties in Africa. ATAF has developed model treaties for double taxation that the countries can adopt.

The ATAF platform draws membership from 38 African nations’ tax agencies.

Wort said tax treaties among African nations are likely to increase government revenues due to growing intra-Africa trade.

He said African countries generally have low tax-to-gross domestic product (GDP) ratios due to weak tax administration.

“On average, Africa’s tax-to-GDP ratio stands at about 22 percent compared to developed nations where the figure is above 30 percent,” he added.

Wort also urged African states to broaden their tax bases to increase domestic resource mobilization.

He said most countries have government revenues that are heavily dependent on commodities and natural resources.

“This makes the countries vulnerable to external shocks such as lower international commodity prices,” he added.

ATAF also called on governments to diversify tax revenues by widening the tax net to include more personal income. Enditem

Source: Xinhua/


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