By MARA Moussa[1] and BRIOT Julien[2]
The subject of taxation is rarely debated during electoral competitions, leaders are not elected in presidential elections on the relevance of their project in terms of taxation. This is valid elsewhere but also and especially in Africa. Alas!
If there is an essential theme for human groups, it is that of the contribution of each to the growth of the group. In this, taxation is absolutely crucial for any country or any community whatsoever.
Taxation is the key to economic or social equity. It ensures that those who earn more resources contribute more than others to the collective effort. It also allows the public authority to redistribute income from the wealthiest to those who are weak in a given society. This stabilizes the community, creates empathy between its members and forges a sense of belonging that is essential to its growth.
Taxation is the most important determinant of regional but also national sovereignty. The independence of a region or a country is constituted primarily by its ability to free itself from the help of others. The attributes of sovereignty mean little in the face of economic and financial dependence. As the saying goes, “the hand that gives is always above the one that receives”. The economic independence of emerging countries is linked to their ability to generate internal resources enabling them to meet their basic needs, which cannot be possible without appropriate taxation.
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This is as valid for a country as for a continent like Africa. Most of our countries are unable to collect tax resources up to 15% of their national wealth, unlike many places in the world where this rate easily exceeds 30%. This results in significant fragility and a need for external resources to finance our priorities. We must therefore make the tax issue a significant objective of our public policies.
Finally, taxation is the key to international justice. Many multinationals free themselves from their tax obligations through particularly complex tax arrangements and the presence of some of their subsidiaries in tax havens. In certain cutting-edge economic sectors, they take advantage of the weakness of public administrations or even of their sensitivity to corruption to evade the tax law and pay less tax, or even not pay it at all. Here too, Africa suffers from many handicaps. Indeed, according to a report by the Osiwa Foundation, the amount of tax evasion by multinationals in the ECOWAS zone, of the order of 210 billion dollars, exceeds that received via development aid. In other words, if national governments managed to limit capital flight and related tax evasion, all of Africa’s ills could be cured. Morality and ethics must be the faithful companions of all the leaders of the continent and these values must be imposed on all the multinationals present on the African continent. Moreover, the Extractive Industries Transparency Initiative (EITI) standard, a global standard for the proper management of oil, gas and mining resources, set up under the impetus of the “Publish what you pay” campaign in 2003 , imposed a certain behavior on multinationals. Otherwise, it would be difficult to impose fiscal citizenship on African populations. This advance would be unparalleled in history.
The above is unfortunately not utopian, quite the contrary! The fight against tax evasion requires political will and quality governance within countries and in the concert of nations. Once this objective has been achieved, it is then necessary to initiate activities to identify and sanction all tax fraud. The initiative of the Organization for Economic Co-operation and Development (OECD) and the United Nations Development Program (UNDP), Tax Inspectors Without Borders, has shown the way in which African countries should go.
Finally, it is desirable that at the international level, institutions such as the OECD or the IMF propose solutions to their members with a view to establishing total harmonization of tax systems and putting an end to tax competition between countries. This hope is reinforced by the proposed minimum tax of 15% on the global income of multinational companies.
[1] Moussa MARA is a chartered accountant, former Prime Minister of Mali, deputy and president of the Yéméla party.
[2] Julien BRIOT is an economist, compliance expert and specialist in issues related to tax evasion. On October 24, a book will be released by Editions Legitech entitled “Dans les Méandres de la Fraud Fiscale”.