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Global Fiscal Justice Fair in Accra

February 25th, 2014 Posted in English, essentials services, Ghana

Panel Discussion with VitusThe five day conference on Capacity for Research and Advocacy for Fair Taxation (CRAFT) conference was held in Accra between the 4th and 8th of February 2014. Over 60 participants from OXFAM affiliates, government representatives and Civil Society Groups from more than sixteen countries exchanged ideas and shared experiences on efficient tax mobilisation for developing countries.

Research conducted by OXFAM indicated that taxation is the most sustainable source of financing development and ending aid dependency as tax has a redistributive function which can reduce inequality, when designed appropriately.

The challenge according to the research for many developing countries in their effort to mobilize domestic resources however is a combination of several factors such as weak tax administrations, regressive tax regimes, wide range of corporate tax incentives and insufficient use of capital taxes.

Alvin Sindiga Mosioma, the Director of Tax Justice Network –Africa believes tax is the price we pay to live in a civilised society but says “it is not just a question of money collection but ensuring that revenue is collected in a way that is fair and just. That is why we are calling for a progressive tax system to ensure that every one is paying according to the ability to pay and not the ability to evade.”

Alvin explains that the challenge of instituting the progressive tax regime is blamed on the unfair international system that is encouraging the shifting of profit from developing countries through tax havens and the competition among countries for foreign investments. This he says  has resulted in “companies changing their names every five years for tax incentives which is further eroding the tax base while at the local level the over dependence on regressive tax like the VAT and  low capacity of tax administrators are also worsening a bad situation.”

Weak international tax system such as profit shifting and transfer mispricing by multinational companies is resulting in loss of revenue up to 50 billion US dollars per year according to Global Financial Integrity research paper.

“We all agree that as citizens we have a responsibility to pay taxes. At the same time the payment of taxes should be appropriate so that it won’t turn into punitive. So far us in Civil Society we are always calling for progressive taxes unfortunately most developing countries are being pushed by developed countries to focus on indirect taxes, consumer based taxes which means that poor people turn to spend more of their income on taxes than rich people which is very unfair”. Vitus Azeem, the Director of Ghana Integrity Initiative fumed.

Vitus further noted that foreign companies get tax concessions which stifle local business making the competition tougher for the local companies. He added in spite of all these incentives the multinationals enjoy “they still find way of avoiding taxes which is very unfair to the local businesses and the country as a whole”.

A Tax Policy Advisor at the Ministry of Finance and Economic Planning, Dr Edward Larbi Siaw who represented the Sector Minister criticised the situation where only few Ghanaians honour their tax obligations.

“We cannot continue to deal with a population of 25 million and collect taxes from only two million out of six million eligible tax payers,” he added.

The Deputy Campaign Manager of OXFAM, Stephen Hale said he was impressed with discussions. “I see a high level of political will and we see that from the representative from the Ministry of Finance who has indicated his ministry’s quest to put together new administration to mitigate some of these challenges”.

Discussants in unison decried that willingness to pay tax is very dependent on return on investment for citizens and called on Civil Society Organisations’ participation in taxation to contribute to state-building. They stressed the impact the Civil Society groups can make in ensuring tax justice through proper monitoring and a call for accountability.

See the photos of the meeting

Naana Nkansah Agyekum
Media and Communications Officer
Oxfam in Ghana

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