Addis Ababa: African countries are seeking a platform that can address the ‘biased and the skewed nature of the current global tax system’ which has been benefiting richer capital exporting countries, Tax Justice Network Africa (TJNA) Executive Director Chenai Mukumba said.
Speaking to ENA on the sidelines of the first Preparatory Committee Conference for the Fourth International Conference on Financing for Development, the executive director noted that the challenges of the African tax systems are broad and diverse.
For example, there is a need for Africa to address a number of national level concerns. But if we don’t tackle unlimited the amount of revenue we are able to raise domestically, we will face a problem.
There are, however, issues that African countries need to promote and advocate at the international level at the same time to support the domestic efforts to raise resources, she added.
The main focus of the discussions during the Financing for Development Conference was the international econo
mic governance that we are really pushing in order to promote the reform of the global tax system.
‘Essentially, what African countries are saying is that we need a platform that is inclusive, that is democratic, and that understands our context and our constraints; and also a platform that can address currently the bias and the skewed nature of the current global tax system that’s benefiting richer capital exporting countries.’
On the other hand, African countries have some of the lowest tax to GDP ratios in the world, lower than any other region, the executive director stated.
‘That’s due to some domestic issues, but it’s also due to a number of international issues. Now at the international level, there’s a push by African countries to see if we can move the platform where we talk about global rule-making from the OECD to the United Nations.’
The reason for this is because the United Nations, at least all African countries, have to have a say in the discussions about the reform of the global tax system
.
Mukumba said if African countries have a say they can then push for a global tax system that understands the context of African countries.
In 2022, the African Group tabled a proposal to begin discussion about how to enhance international tax cooperation, she said.
The proposal was adopted by consensus at the UN.
The Africa Group, as much as they are really pushing for a progressive global tax system, there is a significant push back, the executive director revealed.
‘What we need is to see much more support for the negotiations that are happening in New York. We need to see our ministries of finance for member states and ministries of foreign affairs promoting and supporting that process.’
Hence, a holistic approach is needed to address the interconnected national, international and systemic challenges for financing for development, according to Mukumba.
Moreover, she stressed that the reform of the international financial architecture is essential as national development efforts need to be supporte
d by enabling international economic environments.
Source: Ethiopian News Agency