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.

Assessing Tanzanians’ Response to the Implementation of a Mobile Money Transaction Levy

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

Assessing Tanzanians’ Response to the Implementation of a Mobile Money Transaction Levy

Author: Francis Nyonzo

ISSN: 2709-8575
Affiliations: Programs Officer and economist at Jamii Forums with expertise in digital economy and social justice.
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 167–186
https://doi.org/10.47348/AMTJ/V4/i1a9

Abstract

This paper analyses the effects of the mobile money transaction levy in Tanzania. The data used in the study was obtained from the Bank of Tanzania and the Tanzania Communications Regulatory Authority. The study employs interrupted time series analysis to determine the impact of the government levy on mobile money transactions. The results show a significant decrease in the total amount transacted and the average amount per subscriber after the introduction of the levy. The results indicate that the intervention had a significant impact on the average money transacted by subscribers. The study suggests that policymakers should consider alternative revenue sources other than those which affect the government revenue negatively. Further, the government should encourage people to use mobile money to pay for goods and services to increase government revenue.

Does the Quality of ICT have an Effect on Tax Revenue Collection in Africa?

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

Does the Quality of ICT have an Effect on Tax Revenue Collection in Africa?

Author: Katamantou Woenagnon

ISSN: 2709-8575
Affiliations: Gestionnaire des déclarations fiscales à l’Office Togolais des Recettes (OTR)
Source: African Multidisciplinary Tax Journal, Volume 4, Issue 1 (2024), p. 187–207
https://doi.org/10.47348/AMTJ/V4/i1a10

Abstract

This article examines the effect of the quality of information and communication technologies (ICT) on tax revenue collection in Africa. Starting with a sample of 48 countries, observed over the period 1986 – 2017, we use a cointegration model in panel data using fully modified ordinary least squares (FMOLS) technique for the basic analysis. To check robustness, we use dynamic ordinary least squares (DOLS) and canonical cointegration regression (CCR). The results show that the quality of ICT measured in terms of its bandwidth in kilobits per second, contributes positively and significantly to the collection of tax revenues. The findings suggest that development policies should be geared towards fostering both more and better ICTs. In this sense, African states should invest massively in high-speed fiber optic networks, serving the entire extent of their countries to allow tax administrations use of more advanced technologies.