Tax practitioners contributing to the African Renaissance
17 September 2012
Posted by: By Stiaan Klue, Chief Executive
"If the law supposes that," said Mr. Bumble,…
"the law is a ass-a idiot. If that's the eye of the law,
the law is a bachelor; and the worst I wish the law is that
his eye may be opened by experience-by experience."
Charles Dickens, Oliver Twist, 1837
The African Renaissance concept, popularized as part of the post-apartheid intellectual agenda, was first articulated by Cheikh Anta Diop in a series of essays beginning in 1946, which are collected in his book "Towards the African Renaissance: Essays in Culture and Development, 1946-1960". Diop wrote the series of essays as a student, charting the development of Africa.
Among other things the African Renaissance is a philosophical and political movement to end the violence, elitism, corruption and poverty that seem to plague the African continent, and replace them with a more just and equitable order.
Taxation As A Renaissance Catalyst
One of the most pressing issues on the African continent is the dependence on foreign assistance and indebtedness. As Africans we need to focus on boosting tax revenues through broad-based taxation. Experience has shown that this will lead to more predictable revenue collection and meet the developmental agenda of the continent. It will also help to ensure that aid-funded investments are sustainable, and prepare for the gradual exit from aid in the long term.
Most taxable capacity in Africa tends to be concentrated in a small group of taxpayers. As a result individuals and companies with power and influence deploy aggressive tax planning techniques. However, the majority of taxpayers do not have the means to reduce their tax liability. In addition their taxable capacity is low and costly to collect, especially in rural areas.
The result: the middle class and mid-sized companies carry most of the tax burden.
The 21st Century has begun with some serious challenges facing the global community, this contributed to a significant change in the role of professionals, especially in the current difficult economic environment. It is in this environment that Africa faces its own special challenges regarding governance and sustainable state building, of alleviating poverty, sustainability and development through improved tax compliance.
Taxation is central to the development agenda of African states. Resource mobilisation is the financial bedrock on which sustainable, long-term development is built. The raising of tax revenues is arguably the most central activity of any state. Revenue from taxation is what sustains the existence of the state, and provides the necessary financial resources for social and economic infrastructure. Taxation is the administrative heart of government and provides the funds to supply public goods and implement effective regulation.
The law (and tax practitioners) should not be an ass
African legislators should draft tax laws that alleviate the tax burden of the middle class.
As African tax professionals we have a duty to contribute to the development of the African continent. We should therefore build relationships with all stakeholders and contribute to the efficiency of the tax collection system.
It is incumbent on tax professionals to take responsibility for developing a healthy relationship between their clients and revenue administrations, and for providing the necessary technical guidance and support for the creation of a satisfactory tax compliance culture.
We should be proud to participate in the African Renaissance.