African countries have been challenged to employ modern technology interventions in addressing issues of tax non compliance as the world is embracing the advent of global technology transformation.
Secretary to the Treasury, Ben Botolo, made the call at the Bingu International Convention Centre (BICC) in Lilongwe Wednesday, where he opened a two day long 18th Forum for Value Added Tax (VAT) Administrators in Africa (VADA).
He explained that the power of VAT extended beyond the face value contribution to a country’s fiscal policy and that electronic fiscal devices in monitoring tax compliance were critical in optimizing tax revenue collection.
Botolo said of Africa’s main challenges was that most countries were still cash economies saying; “In non-cash economies where (for example) monitory transactions are conducted through electronic cards, taxes are already embedded in those services as opposed to income tax where people still use cheques to pay tax. If we too can reach that stage then tax collection will be easier.”
He said Malawi had covered a commendable positive mileage in migrating to electronic monitoring of tax compliance, and disclosed that the Tax Administration Act was in the offing to further harmonise tax collection compliance, though he was quick to mention that there was still room for improvement.
Chairperson for VADA and who is also Uganda’s Commissioner for Domestic Taxes Department, Henry Saka underscored the need to formalize regulatory strategies of how businesses operate and comply with tax revenue payments.
He pointed out that, “We would look at several schemes that are used to evade tax, and design African solutions to them.”
Saka said VADA provides technical support and expertise to at least 12 non-member countries, and amongst the 10 member countries are Malawi, Zambia, Uganda, Tanzania and Rwanda.
VADA Forum brings together the 10 African member countries’ Commissioners and Administrators of the VAT to share and analyze tax non compliance challenges, and propose accordingly interventions, with a view of improving domestic revenue resource mobilization for economic development.