Exploring untapped sources of revenue

Some 150 delegates are meeting in a forum to explore ways in which, without increasing taxes, government can improve its ability to collect money from a broader range of sources inside the country to fund its development  projects.

The delegates, who include academics, researchers, tax administrators, students, tax practitioners, consultants and decision-makers on fiscal and tax policy in Africa from across the continent and beyond are attending the 2^nd African Tax Research Network (ATRN) congress which is taking place at the Savoy Seychelles Resort & Spa at Beau Vallon.

The three-day congress was officially opened yesterday by the Minister for Finance, Trade and the Blue Economy Jean-Paul Adam in a ceremony attended by several distinguished guests.

Taking place under the theme ‘Financing sustainable development in Africa: Identifying untapped and under-utilised sources of revenue’, the congress is being co-hosted locally by the Seychelles Revenue Commission (SRC) and the University of Seychelles (UniSey) in partnership with the African Tax Administration Forum (ATAF) based in South Africa. 

Logan Wort, ATAF’s executive secretary, said during the three-day congress the tax researchers will look at tax policies, administration… to improve advice and policy formulation for African countries including Seychelles, Mauritius to advise governments on how to improve revenue collection and how to broaden their tax base.

“In this particular conference we are going to explore the untapped sources of revenue that can improve government income. Most governments in Africa collect between 40 to 60% of their total national needs from taxes while the rest they have to borrow or get through   aid. What we want to do is reduce the amount of borrowing or aid that Africa gets by exploring ways in which, without increasing taxes,  government can improve its ability to collect money from a broader range of sources inside the country to fund its development  projects,” Mr Wort explained.

He added that ATAF is the organisation which represents all revenue authorities in Africa and its mandate is to develop model policies and legislations, to train tax inspectors and auditors and to build capable tax administrations for the continent through a number of educational and capacity-building programmes, developing and offering technical help to revenue authorities.

In Seychelles for instance Mr Wort said, ATAF supported the development of an exchange of information system as well as the setting up of a transfer pricing network.

Mr Wort noted that presently revenue authorities on the African continent are facing among their main challenges the lack of automation – too many manual processing, taxes are complicated for both citizens and companies which often result in tax compliance being very difficult.

“Tax administration authorities need to invest in technology to make paying taxes easier. Therefore taxpayers education is very important,” Mr Wort explained.

He went on to state that taxes are increasingly complex and using Seychelles tourism industry as an example where collecting taxes is complicated, Mr Wort noted that “tourism companies are collecting the money in Europe as people are booking on the internet and money is not coming to Seychelles. So we need to develop new tax rules to ensure small economies can continue to benefit from the activities that take place here”.

Mr Wort said 58 policy papers are expected to be presented by academics, researchers and students over the three days. These will later be published in a journal as well as the internet to better inform ministries of finance, central banks and policy-makers so they can broaden their tax base and policy decisions.

Shella Mohideen, the Dean of Enterprise and Professional Development  at the UniSey, welcomed the congress, noting that it is a very important opportunity for the UniSey.

“A university is all about staying relevant and to stay relevant we need to know what is happening in various sectors. This is a very big conference bringing experts and researchers from the African continent and we will make the most of it to build our capacity and conduct research for informed decision-making,” Ms Mohideen said.

For Alison Lister, the deputy commissioner of the SRC, the congress will provide the right platform for its officials to learn and discuss various aspects of the different policy papers presented.

“We can learn a lot from other people and other countries’ experiences, learn international best practices and learn what have worked and what have not worked in other countries which would help us in the advice we give to the Ministry of Finance as well as with our own internal processes,” Ms Lister pointed out.

She added that the SRC is doing its best to collect all the tax liabilities that are outstanding but “we would like more effective collection and to build a stronger relationship with people in the community so that people voluntarily pay the right amount of taxes rather than having the SRC to run after them.”

She admitted that while the SRC has the powers and the right tax collection mechanism in place with internal processes being improved, one of the biggest challenges in effective tax collection is probably the not strong enough relationship between taxpayers and the SRC and this is probably due to poor understanding by people in the community that tax is important for the country and all of us and that the job the SRC is doing is for the benefit of all citizens.

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