Tshwane, 28 May 2021 – The Commissioner for the South African Revenue Service (SARS) Mr Edward Kieswetter was speaking at the 9th meeting of the Africa Initiative which took place online from 26-28 May 2021, as part of Africa month. The conference also coincided with the launch of the “Tax Transparency in Africa 2021: Africa Initiative Progress Report”.
The Africa Initiative was launched in partnership with the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes in 2014, to ensure that African countries are equipped to use the improvements in global transparency and exchange of information to better tackle tax evasion.
Commissioner Kieswetter, who is also the Vice-Chair of the Africa Initiative, co-chaired the conference with his counterpart, the Commissioner-General of the Kenyan Revenue Authority, Mr Githii Mburu, who is the Chair of the Africa Initiative.
Commissioner Kieswetter said tax transparency and exchange of information was vital as business models increasingly evolve to be more digital, non-local and virtual, and physical borders less relevant in the production and movement of goods and services, each of our individual national tax bases are under constant threat of erosion.
“Our taxing rights are constantly being compromised. The richer countries may appear to be short-term losers, and poorer, developing countries may continue to lose. In truth though, over the long term, we as Revenue Administrators, along with our governments, are all likely to be the biggest losers. It has never been more prudent than now for the adoption of tax transparency and exchange of information standards by all revenue authorities, specifically us as African revenue authorities,” he added.
The past year has seen a steady increase in the implementation of tax transparency and the exchange of information standards in many African countries with encouraging results.
“However, we cannot declare an early victory, much is still needed to be done. African tax authorities are clear that the need for skilled tax officials and efficient and effective exchange of information infrastructures are integral to their overall success. The continued development of tax transparency is key to ensuring greater tax compliance and the Africa Initiative should continue to support its members through strong technical and capacity building assistance.”
The meeting noted that, despite the challenges posed by the COVID-19 pandemic, African countries became net senders of exchange of information requests for the first time after significant expansions in exchange of information treaties to more than 3700 bilateral relationships in 2020, up from approximately 2500 in 2019.
In addition, progress on the implementation of automatic exchange of information (AEOI) is continuing with Nigeria starting to exchange in 2020, thereby joining Ghana, Mauritius, Seychelles and South Africa. Morocco and Kenya will commence their first exchanges in 2022.
Since 2009, exchange of information has enabled African countries to identify over EUR 1.2 billion of additional revenues (tax, interest and penalties). In 2020 alone, African countries identified more than EUR 34.8 million in additional taxes due to exchange of information on request (EOIR), and it is expected that the amount will increase substantially in the years to come as African Tax Administrations further develop and refine their exchange of information networks and capacities.
In closing the conference, Commissioner Kieswetter reaffirmed the significance of the Africa Initiative and its 2021 Action Plan. “Africa is not poor, but why are Africans poor? This is our plan we affirm here today, for the benefit of our countries and the continent at large, each one of us should own the plan and give effect to the plan.
“If there is ever an area for tax administrations to co-operate in, it is in the areas of tax transparency and exchange of information. It is only through close co-operation that we can harvest money that is already part of our taxing rights and uplift the lives of ordinary Africans, especially those who are marginalised. I leave you with the following African Proverb as I close this session – If you want to go fast go alone, if you want to go far, go together.”
For more information on the Africa Initiative, refer to the following:
- Statement of outcomes of the 9th Africa Initiative meeting, 26 – 28 May 2021
- Tax Transparency in Africa 2021: Africa Initiative Progress Report (https://www.oecd.org/tax/transparency/documents/tax-transparency-in-africa-2021.htm)
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