Draft report of the regional meeting for the creation of an association of african tax administrators and consideration of major issues in tax policy, legislation and administration

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UNITED NATIONS

ECONOMIC COMMISSION FOR AFRICA ABABA

^istr.

LIMITED

pamm/bub/5/79

3 July 1979

Original: ENGLISH

DRAFT REPORT OF THE REGIONAL MEETING FOR THE

CREATION OF AN ASSOCIATION OF AFRICAN TAX ADMINISTRATORS AND CONSinERATION OF MAJOR ISSUES IN TAX POLICY,

LEGISLATION AND ADMINISTRATION*

(Addis Ababa, 23 June - 7 July 1979)

* Joint I- SDonsore* p^fl

Commission for Africa _{the Germ--} United tf*ti or.s Economic

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PART I

Opening of the meeting

1.

JTh-e' Regional Meeting for the Creation of an Association of African

■ • Tax Administrators' and Consideration of Major Issues in Tax Policy, Legislation and Administration was held at Africa Hail, Addis Ababa

(Ethiopia) from 28 June to 6 July 1979. The meeting was organized by

the United Nations Economic Commission for Africa in collaboration with the German Foundation for International Development. It started with a working group on the consideration of the draft constitution of the proposed Association of African Tax Administrators.

2. The meeting was formally opened on 2 July 1979 by , representative of the secretariat of the United Nations Economic Commission for Africa on behalf of Professor Adebayo Adedeji.. SCA Executive Secretary. The representative read the message from the Executive Secretary. In ^he message it was pointed out that the purpose of the meeting was to.

consider the possibility of launching an Association of African Tax' Administrators and to seek practical solutions to some of the majors problems in the African context. PL informed the delegates that there has been ;a lo,.g-felt need for a re^io^al Association of Tax-Administrators whxch could provide a platform for regular exchange of experiences, ahd for the dissemination of information on tax policies and practices.

It was stressed that one of the purposes of. the proposed Association,would be to. assist its members in ensuring improvements in their tax policies .and the: development of personnel in order to ensure that their tax .systems

are effective and productive of results. .

3. In the message, it was further stated that while a good budgetary

system would permit the channelling of resources into uses of high'

developmental priorities, a tax system appropriately suited to'the needs

of African countries must of necessity discourage the use of scarce

resources in activities of low developmental priorities. It should give

preferential consideration to their use in areas of, high priority.

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The message referred to the necessity of resorting to tax reform planning for closer integration of fiscal policies wi^h -atonal economic planning;

and to the need to make expenditure policies and practices "be in line with the availability of real resources, domestic or foreign as.possible

solution to the problem of recurrent expenditure going up more than the

increase in recurrent revenue. . •■ '

~%.1' It was also emphasized that among the various means available to 'governments for further their development objective, fiscal policy is potentially the most important because it comprises the powerful tools of taxation and budgetary allocations. Effective tax administration could, however, play an important role in the successful operation and

implementation of tax systems and policies, .. ■ ■ ■

5. In conclusion, the message expressed confidence that the meeting would consider the possibility of setting up one or more Tax Training and Research Centres in Africa and that such consideration should be within the context of collective effort to seek a permanent solution to the chronic problem of shortage of trained tax administrators in

African countries.- . . ... : ■ ..,.,

6\ ■ Mr. D. ..trich Venzlaff, Charge I1 Affairs', A.I-V'"■ ' tHe Embassy of

■the Federal'Republic of Germany, who participated in the official-opening of the meeting delivered a statement on behalf of 'the Government of the Federal Republic of Germany and. the German Foundation;for international . Development. In his statement he underlined the role !that ;the prbposed

; Association of African Tax Administrators could play in 'bringing together public tax authorities in the different countries^of'= the African region, promoting understanding and co-operation among them through, sharing and : exchanging of ideas and experiences/taking care of training and research

and providing"facilities for the continuing education of tax administrators

■"■ in order to improve the quality of their performances. Mr. Venzlaff

referred in his"statement/ to the growing importance of tax administration

; in mobilizing increased resources required by the State, He further

pointed out that because of rapid development there is need not only for

the refinement of tax systems towards a more realistic and effective

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appraisal of performance but also for a conscious endeavour to be made for the upgrading of the functional skill of tax administrators at all levels. In conclusion, he stated he was sure that the German Foundation for International Development will intensify its co-operation with African countries in the field of tax administration as this is one of, the most important activities of the Public Administration Promotion Centre of

the Foundation ....

Attendance ''

7'. The meeting was attended by fifteen (15) senior officials as

representatives of the following countries: Botswana, Guinea Bissau,

Liberia, Malawi, Morocco, Nigeria, Niger, Senegal, Swaziland} Togo, Tunisia and Uganda. Namibia attended as an observer. Iii addition, there was an

observer representing the International Monetary Fund ('IMF)' and 'three

consultants provided by the German Foundation for International Develop ment. The list of delegates,, observer and rconsulta,nts is contained in

Annex II of this report. ,

Election of Officers

8,, The meeting elected the following officers for the conduct of its work:

Chairman: Mr. Abdoulaye Diop (Senegal) Vice-Chairman: Mr. A. Odueyungo (Nigeria) Rapporteur: Mr. S.M.B. Kasamale (Malawi)

Adoption of Agenda

9. After considering the provisional agenda presented by the Secretariat the meeting adopted its agenda and schedule of work as contained in Annex 1 of this report.

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... . :. : : ,. - ■ PART II . . ..-..., . - .

.. . , -.-.,.-, ; SUMMARY OF I ciOCEEDINGS -■,.,, ,. ■ ; . ■ ■: ■,

(l+): Formation, of. an: Association ;of African.rTax: Administrators<

,:-■• (Agenda iteiq 54') . - ,i ■■ \ ■•-•■ ' -'■ ■■■ ' ":•■ ■' '' ' ;i " ■ ■ ■

10. Under this agenda itemj the meeting hr-.d before it a background

note (PAMM/Birn/2/79) and a draft constitution of the porposed Association of African Tax Administrators (PAMM/BUD/3/79). . . ; - :-

11. A representative of the Secretariat briefly outlined the justifica tion for the proposed Association by referring to previous ECA and other international forums which1 had re'commended the formation of such an 'Associattitiri.-'! : ■■.■:■

12. For the, conisideratipn of,.:the: draft constitution,, the meeting

decided to resolve;jitself; :into -a working group of the whole. This group reviewed the draft constitution article by article and made several amendments thereto. The amended draft which was subsequently adopted by the meeting is contained in Annex III of this, report. -

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(2) Feasibility of^ esta.biishing one or more high quality Regional Tax Training and Research Centres in Africa (Agenda item 5)

13• Under this item of the agenda, the meeting considered the recommendations maie by the "International Conference on Creation and Development of Regional Centres for Tax Training and Research" which was held at Berlin (West) from:

.19-2,4 June 1978 and which x>ras jointly sponsored by .the German Foundation for.

International Development and the Harvard University International Tax Program*

14• Professor Oldman of the Harvard International Tax Program addressed; the me sting on the subject. It was noted that the report of the Conference had - .;

inter alia recommended the setting up of one or more high quality.Regional Tax Training Centres in Africa. The concept behind these Centres' was outlined by

the Conference as follows: . ■ ■

i) Rather than focussing solely on training in the field of tax adminis

tration, the Centres-would be designed to deal with tax policy issues and the closely related interdisciplinary features.,

ii) These Centres should have a combination of research and training

activities. While the tax research would keen training up to date with information about new developments in the respective fields, the ' training programme, on the other hand, would produce the capability and understanding in tax matters among the participants*, "'■ ''

iii) The Centres would ma.ke comparisons of experiences and practices

convenient and useful* The experiences of different countries linked in an RTC, as. well as the experiences of RTCs and other institutions J located in different areas can be: compared, thereby presenting a

unique.opportunity for exchange of information with respect to the

world-tji.de-variety of.ideas, solutions, proposals and knowledge in the field of tax policies, tax laws' and administrative procedures.

15- The meeting was informed that the African Group of participants in the

Berlin .Conference, concentrated their attention on-, the major issues of the establishment of one or more Regional Centre's in Africa. The Group felt that

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there wao-urgent need-for-the setting up : of such Centres in Africa"to"meet its growing tax training needs. The Group considered~that ths proposed 'RTCs should supplement existing national tax training efforts by providing facilities, for advanced tax training in tax policy, legislation and administration. The

curriculum of these Centres should be based on an interdisciplinary approach so that tax policy and administration should be properly harmonized with efforts that countries are making for economic and social development.

16. In order to design and plan for RTCs properly, the African Group emphasized the need for collecting information on existing tax training

institutions in Africa and proposed that ECA should be requested to undertake thic task on a priority'basis* The Group was.informed that there are already tax training' institutions in Morocco, Nigeria, Tanzania, Egypt and in some other countries which could serve as a basis for the establishment of the proposed

RTCs.

The Group also thought it appropriate that'an agency such as the ECA which is concerned with the economic and social development of Africa should play an active and decisive role in the establishment and development or regional centres in Africa. It could usefully approach aid giving agencies and co ordinate the activities of the Centres-so that their benefits could spread to

all member Countries,, * ■

17- In respect, of the location of the Centres, the Group had expressed the opinion that there was need for feasibility studies of the potential in respect

of costs and other factorsP

10. Following on the deliberations of the Berlin Conference, the Government of the Federal.Republic of Nigeria carried out a feasibility Report on the Establishment of the Regional Centre for Tax'Training and Research in Nigeria with the help of an. expert provided by the Harvard Law School International Tax Program.*, :The summary findings of ^h±^fe^±biliiy Report were also

considered by the meeting (Document P»/l/BUD/l/?9). The main features of this

feasibility Report were also explained'at length" in a special session of the

meeting by Prof, Oliver Oldmari, the Director of the International Tax Program

who attended the -.meeting,as .'an observer,; : ' r '

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19. During'the course of discussions following Prof-. Oldman'p presentation, the idea of having one Regional Tax Training and Research Centre in-,Africa catering to the needs of English, French and" Arabic-speaking countries found great favour. However, it was explained by Prof. Oldman that in view of resource constraints, it may be desirable to concentrate attention initially oa the establishment of a regional centre for English-spealting countries and to extend its operations further on the basis of experience gained.

20. Prof.. Oldman explained that the matter regarding the choice between the Universities of Lagos and Ife for the establishment of the Centre should be left to. .be decided by the Government of Nigeria. The Centre in Nigeria when s.tairted should in due course develop the capability of giving courses in both I-inglish and French, Even if full courses in French cannot be given at the outset, short courses in specialized topics could be arranged by the Nigerian

Centre at the earliest opportunity.

r>l. Prof. Oldman suggested that the proposed Centre should have the benefit of an Advisory Board drawn from the- Ministries of Finance of-between 7 and 9 African1 countries, representing the different subregions and linguistic groups.

12. Regarding financing of the proposed Centre, Prof. Oldman stated that finanoial;..suppQrt J?Quid.be drawn from the Government of Nigeria, the OPEC Special Fund and other bodies like ECOWAS and contributions or fellowships from individual countries. If the idea of the Regional Centre finds favour and ic to be given a concrete shape, Prof. Oldman suggested-the setting up. of a Steering Committee composed of representatives of the .Government of Nigeria, Harvard Law School HP, the Association of African Ta:t Administrators, EGA

and some other interested African countries.

23. The pros and cons for the establishment of a Centre in Nigeria and other

related issues were further discussed by the meeting and the following consensus

of opinion emerged from these deliberations!

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; ' 'i) There was unanimous .agreement on the need for the establishment of . one or more Regional Tax Training Centres in Africa.on the .lines recommended by the Berlin Conference,, .

ii) The., initiative of the Government of the Federal Republic of Nigeria

in conducting a feasibility study on the establishment of a Regional

Centre and its offer to host the came was highly appreciated.,

iii) With regard to the location of the Centre, and the desirability of one or more regional centres in Africa in the short and long runs, it was observed that the matter should be considered more fully by the Association of African Tax Administrators as the establishment of such Centres for Tax Training and Research fell v:ithin its terms of reference under the provisions of its Constitution,,

iv) The meeting called upon the ECA to prepare on a priority basis an inventory of existing institutional facilities at various levels for tax research in Africa. This inventory would enable the Association to consider the matter of setting up of Regional RTCs to meet the needs of different tax systems and language groupings in Africa on a more systematic and sustained basis,

(3) Panel presentations and discussions on selected majjqr issues of tax

systems and their improvements (Agenda item 6)

24. Under this agenda item, various specific problem areas of fiscal and tax policy were discussed* A detailed report on the issues discussed ana

conclusions reacheC will be incorporated in the final report of the meeting«

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/ II

LIST OF PARTICIPANTS/

LISTE DES PARTICIPANTS

Country/Pays

BOTSWANA

GUINEA-BISSAU/GUINEE-BISSAD

LIBERIA

MALAWI

MOROCCO/MARCC

N3GER

Mr. B.O, GAOBAKWE Commissioner of Taxes

P/Bag 0013

Gaborone, Botswana

M. Jacinto Silva JUNIOR

Chef de la Section des deoensec variables Comissariado de Estado das Finangas

Bissau, Guinee-Bissau

Mr. Philip T. BOlffiN

Deputy Minister of Finance (Revenues)

Sinkor

Monrovia, Liberia

Mr, Henry P. WALKER

Commissioner of Income Tax c/o Ministry of Finance Monrovia, Liberi a

Mr. S.M.B. KASAMALE Commissioner of Taxes P.O. Box 162

Blantyre3 Malawi M. Mohamed CHKOUNDA Inspecteur des Finances Cite "Wafae", Lnm. J Aviation Rabat, Maroc

M. Abdoulkarim PARAISO

Directeur des contributions diverses Direction des contributions diverses B.P. 217

Niamey, Niger

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Annex/Annexe II Page 2

Country/Pays

NIGERIA Mr. John A.I. ADENIREGUN

Assistant Chief Inspector of Taxes Federal Inland Revenue Department P.M.B; 12672 _ ,

Lagos, Nigeria - ■-"■-'■ ■

Mr, Benjamin S.E. OJEIKERE

Assistant Chief Inspector of Taxes Federal Inland Revenue Department P.M.B. 2002

Yaba, Nigeria

SENEGAL

SWAZILAND/SOUAZILAND

TCGO

TUNI3IA/TUNISIE

UGANDA/OUGANDA

Mr.

Deputy Director

Federal Inland Revenue Department P.M.B. 12516

Lagos, Nigeria

M. Abdoulaye DIOP Directeur des IcpCts

Direction generale des Imports

B.P. 1561

Dakar, Senegal

Mr, Samuel M. MASI1ELA Commissioner of Taxes P.O. Box 186

Mbabane, Swaziland

M. Soulemane ABDOULAYE

Directeur general des ImpSts Administration des ImpSts B.P.-321

Lome, Togo

M. Hassen DACKRAOUI

Sous-Directeur des Impots Ministere des Finances Tunis, Tunisie

Mr« E.P, LUBOWA-MWANJE Commissioner of Income Tax P.O. Box 7045

Kampala„ Uganda

Mr. Cyprian BANGIRANA Commissioner for Taxation Ministry of Finance

Kampala, Uganda

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Annex/Annexo II

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Observers/Observateur£

INTERNATIONAL MONETARY FUND/ .

i :il \--PONDS MONETAIRE- INTERNATIONAL

HARVARD LAW SCHOOL

ETHIOP IA/ETHIOP IE

Mr. Mustafa Z. YUCELIK

Senior Tax Administration Analyst International Monetary Fund

Washington, D.C. 20431, U.S.A.

Prof. Oliver OLDMAN Director .■ . .:...■..-

International Tax Program Harvard Law School

Cambridge, Massachusetts 02138, U#S»A.

Mrs. Azieb Negusse Research Officer

Ministry of Finance •-,;-' - j , -

P.O. Box 1905 , iy':."'

Addis Ababa, Ethiopia . , ■» ;

Mr. Adam Tsega Research Officer Ministry of Finance P.O. Box 1905

Addis Ababa, Ethiopia

Mr. Mesfin Asrat Research Officer Ministry of Finance P.O. Box 1905

Sponsoring Organizations/

Organisations sous 1'egide desquejl^s est placee la reunion

GERMAN FOUNDATION FOR-

INTERNATIONAL DEVELOPiVENT/

FONDATION ALLEMANDE POUR LE DEVELOPPEMENT INTERNATIONAL

- Consultant -

Mr. Reinhold BASSE Deputy Director

Public Administration Promotion Center German Foundation for International

Development 1000 Berlin 30

Federal Republic of Germany

Dr0 Arthur STRASSL

Deputy Commissioner of Taxes Ministry of Finance of Bavaria Odeonsplat 4

8000 MOnchen 2

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- Consultant

- Consultant -

ECONOMIC COIVMISSION FOR AFRICA/

COMMISSION ECONOMIQIK POUR L'AFRIQUE

Mr. Ihgo TRENDELENBURG

Chief of the Training Division of the

Ministry of Finance'of Berlin and

Director of the Finance -School of Berlin

NUrnberger Strasse 53

1000 Berlin 30

Dr. Berndt RUNGE Senior Officer

Tax Department (international Tax Law) Granrheindorfer Strasse 106

5300 Bonn 1

Federal Republic of Germany ' - ■ [

Mr. S.I. EDOKPAYI Chief

Public Administration, Management and Manpower Division

Economic Commission for Africa P.O. Box 3001

Mr, I.A. MALIK

Senior Regional Adviser PAMMD

E.C.A.

P.Or Box 3001

Mr. P.J. BASSI Chief

•Budgeting and Financial Management Section J>AMMD ■

p:iP. Box ,3001

Mr. M.N. MASEMOLA ■- ■■ >-'■■

Economic Co-operation Office

E.C.A. " ' "■■■:

P.O. Box 3001-