African countries unite to close revenue leakages in post Covid-19 recovery
A Democratic Republic of Congo pick up loaded with goods from Arua town heading to Ariwara town through Odramacaku border. PHOTO/FELIX WAROM OKELLO
What you need to know:
- The African Tax Outlook (ATO) is ATAF’s flagship publication that affords users the opportunity to have a grasp of the tax architecture on the continent.
African countries have demonstrated a strong post-Covid-19 recovery, with an average economic growth of approximately 5 per cent between 2020 and 2021 among the countries participating in the African Tax Outlook (ATO) initiative, aimed at closing revenue leakages in tax collection.
During the same period, tax revenue mobilised by the ATO participating countries increased by 7.7 per cent. This growth was attributed to the fiscal stimulus measures implemented by countries to counter the impact of the pandemic.
The 2022 Tax Outlook report was launched during the African Tax Administration Forum (ATAF) held in Sandton, South Africa.
The Deputy Executive Secretary, Ms Mary Baine, emphasised the significance of the ATO as a valuable resource for authentic data and emerging tax trends in Africa, covering 37 African tax administrations.
“The African Tax Outlook (ATO) is ATAF’s flagship publication that affords users the opportunity to have a grasp of the tax architecture on the continent,” she said.
Mr Edward Kieswetter, the vice-chairman of the ATAF Council, highlighted that the ATO has become an essential reference for tax professionals working in Africa.
Mr Kieswetter said ATO should be used for evidence-based and data-driven analysis: “Our decisions have to be data and evidence-driven.”
Uganda is among the 37 ATO countries which provided data for ATO 2022 and type of revenue administration agency.
According to the report, Uganda posted a six percent increment in GDP in 2021 and a 10 per cent growth in nominal tax.
During the launch, panelists were concerned about the low revenue collection by many countries due to the high numbers of people carrying out informal business.
In the West Nile sub-region, Uganda Revenue Authority has been battling with smuggling businesses where it loses over Shs2 billion monthly.
In comparison, Namibia realised the highest tax-to-GDP ratio in 2020 (33 per cent) and 2021 (31 per cent) largely due to growth in tax revenue backed by an increase in Southern African Customs Union (SACU) receipts.
The Tax Administrators implored the various tax bodies across the 37 ATO countries to strengthen adoption of E-tax and E-invoicing as a method of effective remittances of taxes.
