Be transparent with public funds, African govts told

Prosper Ndlovu in Sandton, Johannesburg
AFRICAN governments should be more transparent and accountable in how they use the taxpayers’ money as this affects public attitudes towards compliance, tax experts have said.

The high level of non-compliance in many countries on the continent, coupled with rampant illicit financial flaws that drain up to $80 billion annually outside Africa, has been blamed partly on failure by governments to connect taxation and real development that the public can relate to.

Speaking here during the first African Tax Administration Forum (ATAF) media engagement and training workshop, which ended yesterday, business journalists, tax experts and editors were agreed that more needs to be done to enhance accountability in how states spend public funds.

Given the limited foreign direct investment and narrow resource base to finance various development programmes on the continent, participants stressed the need for governments to incentivise revenue collection by channelling it towards projects that impact on ordinary peoples’ livelihoods.

“Taxation is not only about revenue collection but what it buys, it has to be connected with people’s livelihoods and development,” ATAF executive secretary, Mr Logan Wort, said.

He said when citizens derive value for their money, they are likely to be more willing to pay taxes.

Tax expert, Mary Baine, said success in widening the tax base was hinged on the level of trust between authorities and citizens.

He said taxation and state building were closely related and underscored the need for increased tax education and transparency in public spending.

There was intense discussion on best practices on taxation in which a number of loopholes such as high tax rates and transaction costs, complex and costly procedures for creating and registering businesses and lack of proper identification, were highlighted.

Representatives from tax administrators called on governments to take stock of their expenditure patterns and prioritise development funding and provision of key services. It emerged during the engagements that in some instances governments have been accused of splashing public funds on luxury vehicles, classy travelling abroad and hefty allowances.

There was consensus that the media can play a leading role in holding governments to account and influencing tax policy formulation towards transparency. Participants said the effective media coverage of taxation issues would not only promote mutual engagement between governments, tax administrators and the public but also expand knowledge and clear misconceptions around tax issues.

“The media is critical in promoting tax enforcement, compliance and accountability. Journalists should provide indepth and analytical articles on taxation that are correct and factual,” said Mr Wort.

The workshop closed with emphasis on increasing media access to tax information with tax administrators and governments working closely with the media to enhance revenue collection and proper use of those funds.

Tax administrators made a commitment to transparency by fighting graft, availing information to the public throught the media, prividing expertise and media training whenever it is needed.