Dynamics of Taxation and Economic Governance : What Design for the Uemoa Zone?

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

Dynamics of Taxation and Economic Governance : What Design for the UEMOA Zone?

Author: Fidel Saliga

ISSN: 2709-8575
Affiliations: Faculté des Sciences Economiques et de Gestion, Université d’Abomey-Calavi
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 58–77
https://doi.org/10.47348/AMTJ/V4/i1a4

Abstract

Financing development is an imperative for any system of governance. Failure in the resource mobilisation process undermines economic growth. The objective of this paper is to analyse the effect of economic governance on public contributions in UEMOA countries. The econometric estimation carried out using the generalised least squares method over the period from 2009 to 2020 shows that governance has a positive and significant effect on total tax revenue. The governments of these WAEMU countries must put in place more effective mechanisms to accelerate the collection of tax revenues while protecting vulnerable taxpayers.

An Appraisal of Carbon Taxes for Alignment to Socio-Economic Realities of Africa

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

An Appraisal of Carbon Taxes for Alignment to Socio-Economic Realities of Africa

Author: Khan Teyim Pila

ISSN: 2709-8575
Affiliations:Policy Analyst, Legislation and International Tax Relations Division, Directorate General of Taxation, Cameroon
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 78–101
https://doi.org/10.47348/AMTJ/V4/i1a5

Abstract

Weather fluctuations are negatively impacting global growth; hence, continued calls for global carbon mitigation are being made. Research, especially in the European Union (EU), reveals that carbon pricing and emission trading systems are innovative and flexible enough to address market failures caused by externalities linked to carbon emissions. However, these countries lack proxies in Africa, and there is a research gap on how such taxes could be designed to align with Africa’s socio-economic realities. Through a literature review of open-source, but recent, studies on the subject, this paper seeks to fill this research gap, while creating a foundation for next-generation research in this area. The paper argues that, despite Africa’s low carbon footprint, economic realities and prospects, the implementation of the Carbon Border Adjustment Mechanism (CBAM) by the EU (one of Africa’s major trading partners) has rendered such taxes inevitable in Africa; hence, implementable policy alternatives aligned with the region’s socio-economic realities are needed.

Do Reforms in Automation Reduce Tax Compliance Costs in Africa? A Staggered Double-Difference Approach

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

Do Reforms in Automation Reduce Tax Compliance Costs in Africa? A Staggered Double-Difference Approach

Authors: Nassibou Bassongui; Albert N’lédji Honlonkou

ISSN: 2709-8575
Affiliations: Ecole Nationale d’Economie Appliquée et de Management, Université d’Abomey-Calavi, Bénin
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 102–122
https://doi.org/10.47348/AMTJ/V4/i1a6

Abstract

This study evaluates the effect of e-taxation on the costs of tax compliance using a large sample of 53 African countries over the period 2004-2020. The econometric approach based on the staggered difference in difference estimator has allowed highlighting the causal effect. By controlling for heterogeneity and taking into account the dynamics of the effect of e-taxation, the results of the study show that e-taxation reduces the costs of tax compliance. Specifically, the e-taxation reform reduces the average number of tax payments per year in the long term. However, its effectiveness in reducing the time required to prepare and pay taxes is effective in the short and medium run. These results suggest the need to establish a rigorous system for monitoring e-taxation reforms in Africa. Innovations should accompany the reform in order to limit corrupt behaviour and bad governance.

The Need for a Responsive African Business Community in International Tax Cooperation

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

The Need for a Responsive African Business Community in International Tax Cooperation

Author: Opeyemi Bello

ISSN: 2709-8575
Affiliations: PhD Candidate, Schulich School of Law, Dalhousie University, Halifax, Canada
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 123–148
https://doi.org/10.47348/AMTJ/V4/i1a7

Abstract

The paper examines how the African business community can complement the efforts of the African states in international tax reforms. It argues that international tax cooperation is not exclusive to state actors; non-state actors, particularly businesses, have significant roles to play, considering their expertise in the global business environment. The noticeable absence of African businesses in public engagement with the Organization for Economic Cooperation and Development’s (OECD’s) work on the tax consequences of a digitalised economy justifies the need to undertake this study to demonstrate how African businesses can support their home governments in demanding international tax reforms. It seeks to demonstrate to African business actors the significant role played by shadow treaty negotiators played and other business actors in negotiating tax treaties that may significantly impact the African market. The paper presents three reasons why African business actors should be proactive in international tax cooperation. It also provides a practical framework for how they can engage with international tax initiatives. As a case study, the paper adopts a descriptive and analytical-qualitative approach to examine the OECD BEPS Inclusive Framework’s Two-Pillar proposal to address the tax consequences of the digitalised economy.

Analysis of Mining Rent Sharing : Case of the Kamoa-Kakula Project

by | Jul 3, 2024 | AMTJ, AMTJ 2024 I1

Analysis of Mining Rent Sharing : Case of the Kamoa-Kakula Project

Author: Mukoko Akabuele P

ISSN: 2709-8575
Affiliations: Economiste, Inspecteur des Finances à l’Inspection Générale des Finances RDC
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 149–166
https://doi.org/10.47348/AMTJ/V4/i1a8

Abstract

This article aims at analyzing the rent sharing within the framework of the Kamoa-Kakula project which consists of the exploitation of a copper mine, located in the DRC. Based on data from the Integrated Development Plan of this project, published in October 2020, we used the FARI model approach to analyze the tax regime of the 2018 mining code and estimate the share falling to the State and the investors. Analysis of the results of our estimates shows, on the one hand, that the tax burden is close to observed international trends. Expected state revenues are USD 7.3 billion, according to the base scenario, while the Average effective tax rate (AETR) would be between 40.6 and 53.1%. On the other hand, although the innovations introduced increase the AETR, the latter tends to increase with the profitability of the project. Which allows us to conclude that this tax regime remains progressive, despite the increase in tax rates. Although theoretically, this new code seems advantageous for the State, its implementation should be accompanied by measures aimed at strengthening tax administration and control techniques, with the aim of confronting tax optimization practices.