Ministers of Parliament of Uganda
Senior Members of governments
Revenue Authority Commissioner Generals and Commissioners
Executive Secretaries of COMESA, SADC, SACU,
The CEO of New Partnership for Africa's Development (NEPAD)
Representatives of Development Partners
Representatives of International and Regional Organisations
Honourable guests
Ladies and gentlemen
Good morning
The launching of ATAF
It is an honour for me to welcome all of you to the official launch of the African Tax Administration Forum in Kampala, Uganda. We gather here in Uganda today, a little more than a year after the commitment we made to ourselves, at the International Conference on Taxation, State Building and Capacity Development in Africa, held in Pretoria, South Africa on 28 to 29 August 2008.
The idea of establishing ATAF preceded any appreciation of what the extent of the global financial and economic crisis would be. It was not a reactionary decision, but a well guided choice based on our shared understanding of:
- the importance of taxation in state building,
- the changing environment of taxation in Africa, and
- the importance of strengthening African tax administrations.
There is no doubt any more that taxation must be central to Africa’s development agenda. Building effective and efficient tax systems is vital to meet our development responsibilities to our people in a sustainable manner.
Why does Africa need ATAF?
This conference provides an opportune time for us to pursue stronger cooperation in the field of tax policy and revenue mobilisation. We indeed have been dealt a huge challenge by the current state of the world economy, as we face the deepest global economic recession in decades, and those least responsible for the crisis stand to bear the brunt of its impact over the long term.
We have to take this adverse situation and turn it into an opportunity to build stronger economies. The international community have come together and agreed that the crisis requires global solutions. The commitments of the Group of 20 in London, Pittsburgh and earlier this month in Scotland, have proven that developed and developing countries can work together to address the development agenda and inequalities.
The work of the IMF, World Bank and other international and regional organisations has shown that concrete action can have beneficial results. But - that is not enough.
We have committed ourselves to the UN Millennium Goals. As we meet here today, and if current trends prevail, while some countries on the African Continent will meet some Goals, they are unlikely to meet all of them by 2015. In some cases, the gains made will likely be eroded by the consequences of the global financial and economic crisis. At the International Conference on Financing for Development in Monterrey, Mexico in March 2002, we committed ourselves to eradicating poverty and achieving sustainable economic growth and development.
We also agreed that every country has primary responsibility for its own economic and social development through national policies and development strategies. This is where the African Tax Administration Forum has a concrete role to play. We recognise that in order for Africa to accelerate development, we need to improve capacity building, governance and policy making. ATAF presents a forum where these important issues, in the context of taxation, can be discussed, analysed and where best practices can be identified, shared and implemented. Taxation, transparently and effectively designed and implemented provides an essential financial platform for sustainable development;
- reduces the reliance on aid and mineral rents;
- improves the environment in which business is carried on; and
- increases government accountability
by encouraging international trade, domestic and inward investment, and economic growth.
The journey up to Kampala
As mentioned earlier, it has been little over a year since we met in Pretoria. It is worth noting the work we have done since that meeting leading up to today. At the Pretoria meeting in August 2008, thirty African Tax Administrations mandated a Steering Group made up by the Revenue Administration Commissioners from Botswana, Cameroon, Ghana, Rwanda, South Africa and Uganda to develop an African Tax initiative; and a Technical Task Team consisting of Senior Officials from those Revenue Administration to support the work of the Steering Group.
The diligent work that followed that event enabled an African vision for international cooperation to evolve. The ATAF Steering Group met on three occasions in the interim. At its first meeting in Cape Town, South Africa, in February 2009, the Steering Group agreed on the adoption of the Road Map for 2009, 2010 and beyond; the development of the ATAF Agreement and Rules and Procedures; and the establishment of an Interim Secretariat, hosted by the South African Revenue Service, to implement the ATAF roadmap.
The second meeting of the Steering Group convened in Accra, Ghana, in June 2009 saw the meeting approve the implementation of four technical events. To date the following, very successful, technical events were held: from 21 to 23 July 2009 in Uganda on Implementation of Transfer Pricing; from 12 to 14 October 2009 in Botswana on Taxation of natural resources; and from 2 to 6 November 2009 in Korea on the Mobilisation of Domestic Resources. This event took the form of a study tour and seminar.
A fourth Technical Event on Financial Markets is scheduled to take place at the Organisation for Economic and Cooperation Development (OECD) Multilateral Tax Centre in Vienna, Austria, from 7 to 9 December 2009. During the third meeting of the Steering Group in Abuja, Nigeria, in August 2009, the Commissioners reviewed progress made towards the establishment of ATAF and the implementation of the ATAF Road Map. None of our successes thus far would have been possible without the support of our donor and development partners. The OECD, African Development Bank and IMF have provided us with technical assistance for the events we have hosted, whilst GTZ and the African Development Bank have provided financial assistance for this launch. All of which have played a vital role leading up to today, where we are meeting in Kampala.
The challenges for ATAF
Whilst the journey up to here has been relatively smooth sailing, we are not oblivious of the challenges ATAF will face in the future. Firstly, political will is always a significant challenge. Taxation underpins effective state-building and implies a higher level of accountability of governments to citizens, which in turn necessitates good governance. Good governance is of paramount importance because:
- raising taxes efficiently requires political effort to secure taxpayer consent
- raising taxes effectively requires the development of a competent bureaucracy and
- raising taxes equitably requires concern for the fair and equal treatment of citizens by the state.
Secondly, the very nature of the tax base within African countries is complex, with large agricultural sectors and shadow economies outside the formal tax structure. The potentially reachable tax base is therefore smaller than the total economic activity. This will require creativity on the part of the ATAF membership to develop appropriate policies, processes and tools to explore these revenue sources more effectively.
ATAF will need to ensure that it operates in an effective and sustainable manner, with the support of all African countries. As we meet here today, I can confirm that we have received membership application forms from 22 African countries. Though this is an impressive number for a new organisation, we want more and I urge each and every one of you here today, to speak to your African partners that have yet to commit to ATAF, in order for this Forum to be truly representative and become the central platform for African administrators to discuss and develop tax priorities and policy on the African continent. I believe this launch provides an excellent opportunity to chart the path of ATAF and I am aware that if we have a functional approach and good strategies we can manage better even new challenges.
Today we will be discussing the ATAF Agreement and Rules and Procedures with the objective of formalising the establishment of the African Tax Administration Forum. This includes the formation of its first Council and interim Secretariat and the election of the first ATAF Chair and the ATAF Secretariat Host Country. More importantly, we are meeting here today to approve the ATAF work programme and adopt important resolutions aimed at facilitating the work of the ATAF Council and Secretariat. Tomorrow, we will engage with our donor and development partners on issues relating to revenue mobilisation and state-building in Africa. Importantly, we also will present and seek the approval of our ATAF Proposal to our development partners.
This Proposal is aimed at strengthening cooperation between ATAF and its development partners to ensure the success of ATAF. As mentioned earlier, our partners have played a valuable role leading up to today, and we urge their continued support and assistance in funding the ATAF work programme. The African Tax Administration Forum must be about its value proposition and is a response to an imperative need. We must work it, find it and benefit from it. My challenge to all of us today is to delve deep into discussions so that we can expose any weaknesses that might prevent us from achieving our objectives; identify gaps that we need to plug; and devise strategies that can take us to the next level.
It is my sincere hope that we will have very fruitful deliberations and come up with actionable decisions. With these few remarks, I have the honour to declare this conference officially open.
Thank you.
Source: South African Revenue Services
