The Impact of Tax Treaties on the Promotion of FDI: the Case of Morocco

by | May 21, 2023 | AMTJ, AMTJ 2023 I1

The Impact of Tax Treaties on the Promotion of FDI: the Case of Morocco

Author: Amine Doghmi

ISSN: 2709-8575
Affiliations: National Institute of Statistics and Applied Economics, Rabat, Morocco
Source: African Multidisciplinary Tax Journal, 2023 Issue 1, p. 198–212
https://doi.org/10.47348/AMTJ/V3/i1a10

Abstract

Foreign direct investments (FDI) play a decisive role in stimulating economic growth and the socio-economic development of developing countries. Foreign investors look for states that offer an environment that is favourable to business and investment. With this in mind Morocco has adopted a policy of attracting foreign investors by reducing administrative obstacles to investment and introducing advantageous tax incentives, including the conclusion of double taxation treaties (DTT). The impact of DTTs on the promotion of FDI has given rise to some debate: the results of studies thereon have diverged, depending on the country. In the Moroccan context, the interpretation of the results of the ARDL model used in this article shows that the impact of DTTs on FDI is statistically insignificant. Consequently, the Moroccan tax authorities should start thinking about a cost-benefit analysis of these tax treaties.

Impact of Implicit Tax on Personal Income Tax Compliance Behaviours

by | May 21, 2023 | AMTJ, AMTJ 2023 I1

Impact of Implicit Tax on Personal Income Tax Compliance Behaviours

Authors: lhasan Usman and Professor Victor Kyari Gimba

ISSN: 2709-8575
Affiliations: Federal Inland Revenue Service (FIRS) Nigeria; Professor and Head of Department, Department of Economics, Kaduna State University (KASU), Nigeria
Source: African Multidisciplinary Tax Journal, 2023 Issue 1, p. 213–236
https://doi.org/10.47348/AMTJ/V3/i1a11

Abstract

The objectives of this study are to examine the impact of implicit tax, income level and the perception of corruption on personal income tax compliance level in Kaduna State, Nigeria. The data were retrieved from primary sources, and 486 questionnaires were screened and analysed. The Breusch-Pagan-Godfrey Heteroskedasticity test was conducted to determine the presence of heteroskedasticity or otherwise, while the weighted least square regression model was used to analyse the study’s data. It was found that implicit tax and perception of corruption have a significant negative impact on personal income tax compliance behaviour, while income level has an insignificant positive impact on personal income tax compliance level. This study concluded that implicit tax and perception of corruption are important determinants of personal income tax compliance behaviour in Kaduna State, Nigeria. Therefore, the study recommended that Kaduna State government and its relevant agencies should do as much as they can to discharge their constitutional responsibilities and provide the necessary public services. The relevant tax authority should double its efforts in ensuring that all taxpayers, no matter their level of income, comply with the provisions of the relevant tax laws and the regulations of the relevant tax jurisdictions.

Impact of the AfCFTA Agreement on Customs Revenue: case of Togo

by | May 21, 2023 | AMTJ, AMTJ 2023 I1

Impact of the AfCFTA Agreement on Customs Revenue: case of Togo

Author: Bayoma Wili Samara

ISSN: 2709-8575
Affiliations: Macroéconomiste-financier, Chef Section budget, Direction des finances, Office Togolais des Recettes, TOGO
Source: African Multidisciplinary Tax Journal, 2023 Issue 1, p. 237–253
https://doi.org/10.47348/AMTJ/V3/i1a12

Abstract

The problem of loss of budgetary revenues with the implementation of the African Continental Free Trade Area (AfCFTA) agreement remains a concern, especially for the least developed countries. The losses resulting from the removal of tariff barriers deserve to be assessed in order to allow public authorities to establish mitigating measures. Drawing from this perspective, this paper aims to quantitatively assess the impact that the AfCFTA agreement has on Togo’s customs revenue. Using the differential method of current and future tariff regimes, the results of the study estimate the total loss in Togolese customs revenue during the first three years of the implementation of the Agreement at 30.9 billion CFA. This loss represents up to 0.25 per cent of the GDP and 22.67 per cent of the customs revenue collected, which could further widen the country’s budget deficit, and consequently compromise the financing of its development needs. Faced with such a situation, the Togolese state should carry out major internal tax reforms and public policy, consisting among others of broadening its national tax base, promoting the facilitation of intracontinental trade, and supporting the private sector through financial mechanisms in order to contribute to their competitiveness in light of the competition from other foreign companies.

Tax Awareness Among Micro-Business Owners in Informal Settings

by | May 21, 2023 | AMTJ, AMTJ 2023 I1

Tax Awareness Among Micro-Business Owners in Informal Settings

Author: Ayodele Ibrahim Shittu

ISSN: 2709-8575
Affiliations: Department of Economics, University of Lagos, Nigeria
Source: African Multidisciplinary Tax Journal, 2023 Issue 1, p. 254–272
https://doi.org/10.47348/AMTJ/V3/i1a13

Abstract

This paper broadly seeks to examine the determinants of tax awareness among micro-entrepreneurs in informal settings in the Bariga Local Council Development Area (LCDA) of Lagos State, Nigeria. Specifically, this paper examines the effects of business size, business records and tax education on tax awareness among microentrepreneurs in informal settings there. Tax awareness in this study is treated as a dichotomous variable to test the statistical significance of each of the predictors. The study uses a multiple logistic regression analysis. The findings show that gender, education, business records and tax education are significant predictors of tax awareness among the micro-entrepreneurs in informal settings. The study makes a significant contribution to an understanding of taxation in informal sector, especially in the African context where the size of informal settings significantly impacts the sustainable development of the economy at large.

An Analysis of Gender Equality and Tax Policies in Zimbabwe

by | May 21, 2023 | AMTJ, AMTJ 2023 I1

An Analysis of Gender Equality and Tax Policies in Zimbabwe

Author: Learnmore Nyamu Zanga

ISSN: 2709-8575
Affiliations: Committee on Fiscal Studies (CFS)
Source: African Multidisciplinary Tax Journal, 2023 Issue 1, p. 273–302
https://doi.org/10.47348/AMTJ/V3/i1a14

Abstract

This paper analyses the relationship between gender equality and tax policies in Zimbabwe. It focuses on direct and indirect taxes, and explicit and implicit gender biases in the current tax system. The study under review used desktop research and a gender-disaggregated tax-incidence analysis to find that Zimbabwe’s tax laws do not have any explicit bias against women. However, indirect taxes like value-added tax, informal taxes and trade taxes, which make up 60 per cent of all tax revenue, have implicit biases against women that are hard to see. Tax data needs to be genderdisaggregated to ensure that the total revenue mix is fair to women and supports gender-transformative tax policies, both in terms of how revenue is raised and how it is spent. To increase revenue and reduce implicit bias against women, the government must close loopholes for illicit financial f lows, increase progressive taxes, evaluate incentives, and eliminate harmful incentives.

Assessment of Impact of the COMESA-EAC-SADC Tripartite Free Trade Area on Tax Revenue in Malawi

by | May 21, 2023 | AMTJ, AMTJ 2023 I1

Assessment of Impact of the COMESA-EAC-SADC Tripartite Free Trade Area on Tax Revenue in Malawi

Author: Miriam Banda Mhango

ISSN: 2709-8575
Affiliations: Senior Tax Policy Analyst – Policy Planning and Research Division, Malawi Revenue Authority
Source: African Multidisciplinary Tax Journal, 2023 Issue 1, p. 303–330
https://doi.org/10.47348/AMTJ/V3/i1a15

Abstract

This study assessed the impact of Malawi’s joining the upcoming COMESA-EACSADC Tripartite Free Trade Area (TFTA) on Malawi’s tax revenue. The TFTA countries have agreed to liberalise 60 to 85 per cent of tariff lines once the Agreement comes into force, while the remaining 15 to 40 per cent will be negotiated in due course. Three simulations were conducted using the Tariff Reform Impact Simulation Tool: full liberalisation, 85 per cent liberalisation, and 60 per cent liberalisation. The findings reveal that the TFTA will have a negative impact on Malawi’s tax revenue. The findings also indicate which are Malawi’s revenue-sensitive goods under the TFTA, and how the list will change depending on how much the country liberalises its trade. The study also establishes that Malawi’s manufacturing sector will be the most affected sector under the TFTA. In conclusion, it is recommended that since Malawi is joining the TFTA, it should consider improving and reforming tariff revenue collection to protect itself from the expected revenue loss.

Impact of Tax Compliance Enforcement Initiatives in Uganda: case Study of the Value-Added Tax Fraud Campaign

by | May 21, 2023 | AMTJ, AMTJ 2023 I1

Impact of Tax Compliance Enforcement Initiatives in Uganda: case Study of the Value-Added Tax Fraud Campaign

Author: Micah Samuel Gaalya

ISSN: 2709-8575
Affiliations: Uganda Revenue Authority
Source: African Multidisciplinary Tax Journal, 2023 Issue 1, p. 331–347
https://doi.org/10.47348/AMTJ/V3/i1a16

Abstract

By utilising the economic deterrence theory of tax compliance the study establishes the impact of a VAT fraud campaign on taxpayer behaviour in Uganda. The study employed grouped matching difference-in-differences in regressions. We used monthly time-series data for 563 taxpayers for the period 2017–2018. The data was acquired from the Uganda Revenue Administration (URA) database. The results show that there was a small improvement in compliance behaviour over a timeframe of one year after the implementation of the VAT fraud campaign. Return filing increased by 35 per cent, timeous or on-time filing increased by 5 per cent and non-filing decreased by 3 percent. The policy implications are that the URA should put more effort into improving return filing since this should lead to important behavioural change. In addition, the URA should design specific risk treatment strategies targeting late and non-filing. Lastly, future compliance risk mitigation strategies should be focused on specific sectors where lessons learnt can easily be replicated in respect of different taxpayers within a given sector.

A conceptual framework for the legitimate elimination of the developmental mandate by state-owned companies in South Africa

by | May 20, 2023 | JCCL, JCCL V8 I2

A conceptual framework for the legitimate elimination of the developmental mandate by state-owned companies in South Africa

Author: Genevieve Paige Wagener

ISSN: 2521-2575
Affiliations: Attorney of the High Court of South Africa
Source: Journal of Corporate and Commercial Law & Practice, Volume 8 Issue 2, 2022, p. 1 – 28
https://doi.org/10.47348/JCCL/V8/i2a1

Abstract

The Republic of South Africa has adopted developmental ideals as part of the principles governing its public administration, including using state-owned companies (SOCs) as a mechanism for executing the developmental mandate. However, in terms of s 195(1)(b) of the Constitution of the Republic of South Africa, 1996, these principles must be balanced with the principle of promoting ‘[e]fficient, economic and effective use of resources’. South Africa’s state-owned entities currently face numerous challenges affecting their efficiency, effectiveness and viability. This article focuses on SOCs as legal entities and considers structural changes to the legislative framework within which these entities function to address these challenges. The proposed statutory amendments set out in this article aim to utilise the existing tested and functioning framework of the Companies Act 71 of 2008 to align the definitional requirements in the Public Finance Management Act 1 of 1999 that certain state-owned entities pursue purely commercial mandates with the requirement that a ‘state-owned company’ (as defined in the Companies Act) is a profit company which must operate for the financial gain of its shareholders. The article also proposes the introduction of a ‘stateowned enterprise’ into the Companies Act to accommodate the developmental mandate in a legislative structure which fosters more sustainability and accountability than the current legislative regime.

The role of beneficial ownership reporting obligations and the reckless trading provision to prevent front companies in terms of the Companies Act 71 of 2008

by | May 20, 2023 | JCCL, JCCL V8 I2

The role of beneficial ownership reporting obligations and the reckless trading provision to prevent front companies in terms of the Companies Act 71 of 2008

Author: Neha Dhana

ISSN: 2521-2575
Affiliations: LLM candidate, University of Witwatersrand
Source: Journal of Corporate and Commercial Law & Practice, Volume 8 Issue 2, 2022, p. 29 – 54
https://doi.org/10.47348/JCCL/V8/i2a2

Abstract

The corporate form has the potential to be abused by natural persons. A front company is an example of such abuse. A front company is an incorporated company that is used as a vehicle to conduct illegal activities. The natural persons that control this front company and ultimately benefit from proceeds derived from the illicit conduct conceal their identity by hiding behind the company’s separate legal personality to escape civil and criminal liability. A report indicates that billions of rands are obtained through illegal activities perpetrated against the corporate form in South Africa. This means that natural persons can successfully misuse the corporate form as a front. For this reason, it is imperative that a legal framework is in place to circumvent the formation and operation of front companies. Foreign jurisdictions such as the United States of America and Kenya deter front companies by recognising beneficial ownership and placing a reporting obligation on beneficial owners to reveal themselves to a regulatory body. The abuse of the corporate form as a front is a company law issue and ought to be regulated by the South African Companies Act 71 of 2008 (Companies Act). However, the Companies Act does not recognise beneficial ownership per se. The Companies Act recognises beneficial interest only in relation to persons that exercise a legal right held in securities. It is argued that to prevent front companies in South Africa, the Companies Act should be amended to fully recognise beneficial ownership and place a report obligation on these persons to reveal themselves to the Companies and Intellectual Property Commission. It is further argued that the statutory remedy, the reckless trading provision, should be expanded to apply to beneficial owners to act as an instrument to prevent the operation of front companies.

Revisiting class action litigations against corporations in Nigeria: Lessons from the US experience

by | May 20, 2023 | JCCL, JCCL V8 I2

Revisiting class action litigations against corporations in Nigeria: Lessons from the US experience

Author: Kalu Kingsley Anele

ISSN: 2521-2575
Affiliations: Lecturer: Pusan National University, Busan, South Korea
Source: Journal of Corporate and Commercial Law & Practice, Volume 8 Issue 2, 2022, p. 55 – 83
https://doi.org/10.47348/JCCL/V8/i2a3

Abstract

Class actions remain one of the most plausible mechanisms to aggregate and ventilate corporate grievances in court effectively. Despite its advantages, including recurrent corporate malfeasance, the class action procedure in Nigeria is limited in scope. This article uses a comparative analysis methodology and the class action regime in the United States (US), which is general in nature under Rule 23, to interrogate the application of the procedure in Nigeria. It argues that Nigeria’s extant class action legal framework is limited in scope since it focuses only on intellectual property infringements. By comparatively analysing the application of Rule 23 in the US in bankruptcy, competition, securities, and human rights cases, the article submits that introducing a general class action framework is imperative in Nigeria. Consequently, this article suggests using legislation, courts, public enlightenment strategy, and guidelines for attorney fees to introduce, strengthen, and implement a general class action regime in Nigeria. This would engender corporate behavioural change, encourage policy regulation, bolster the use of class action by legal practitioners, and facilitate access to court.