Kenya Revenue Authority (KRA) Commissioner General Mr. Humphrey Wattanga has praised African countries for their efforts in modernizing tax administrations despite challenges like informality, governance deficits, and illicit financial flows.
During the ongoing International Bureau of Fiscal Documentation (IBFD) Africa Tax Symposium 2024 at the Safari Park Hotel in Nairobi, Mr. Wattanga addressed delegates, emphasizing the importance of Digital Tax, also known as online VAT, in Africa’s tax future. He noted that technological advancements, global economic dynamics, and evolving tax policy debates will shape Africa’s tax landscape.
“Key considerations include harnessing technology, strengthening governance, promoting regional cooperation, and advocating for fair global tax policies. Embracing technologies like data analytics, AI, and blockchain can improve tax administration operations, compliance, and service delivery. Digitizing tax systems can streamline processes and enhance taxpayer services,” said the Commissioner General.
Mr. Wattanga highlighted the need for enhanced regional collaboration and harmonized tax policies to ensure Africa’s voice is influential in international tax policy debates. He stressed the importance of advocating for fair and equitable tax systems, combating tax evasion, and promoting global tax cooperation.
In particular, Mr. Wattanga urged African tax administrations to implement effective VAT reforms to address revenue losses and create a fair competitive environment for domestic businesses. He pointed out that while VAT has been significant for revenue generation, the expansion of digital trade presents major challenges for VAT systems globally and in Africa.
“The strong growth in online sales of services and digital products, particularly by non-resident suppliers, complicates VAT collection. The prominence of informal economies in Africa further complicates VAT collection, requiring Africa-centric solutions for effective VAT reform,” said the Commissioner General.
Additionally, Mr. Wattanga called on African tax administrations to protect taxpayer rights, uphold integrity, fairness, and accountability, and provide access to effective dispute resolution mechanisms. He stressed that developing a sustainable Domestic Revenue Mobilization (DRM) system requires a comprehensive approach that combines tax administration modernization with taxpayer rights protection and access to effective dispute resolution methods.
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