AFRICAN countries need to improve domestic resource mobilisation as tax performance in the region is still very low, the African Capacity Report 2015 shows.
BY VICTORIA MTOMBA
The African Capacity Building Foundation (ACBF) report, simultaneously launched yesterday in Nairobi and Geneva, says regional countries are expected to develop capacity to improve in domestic resource mobilisation and to pay particular attention to develop the capacity that is needed.
“Tax performance still leaves much to be desired, tax systems are still inefficient and costly, and significant amounts of revenue are lost as a result of tax avoidance. And large estimates of illicit financial flows continue to deprive Africa of its scarce resources,” read the report entitled, Capacity Imperatives for Domestic Resource Mobilisation in Africa.
ACBF Zimbabwe official, Thomas Munthali said there was huge untapped potential African countries can tap from. He said taxes have increased in African countries, but other external flows were not growing.
Munthali said tax revenues in the region increased to $507 billion from $442 billion in 2007.
“We need to look at untapped resources,” he said. Munthali said most countries in the region are not collecting more taxes, but Zimbabwe is slightly above the regional average.
Finance minister Patrick Chinamasa said the launch of the report comes at a time when the country is making strides in intensifying efforts at mobilising domestic resources and this not out of choice but out of necessity.
He said Zimbabwe has established a high level Cabinet committee chaired by Vice-President Emmerson Mnangagwa on domestic resource mobilisation.
Chinamasa said measures such as broadening the tax base by introducing and extending a wide range of taxes on an array of economic activities in the informal sector have been introduced.
ACBF executive secretary, Emmanuel Nnadozie said domestic resource mobilisation is a prudent way to sustainably finance African development.
“Some countries have well understood and are putting in practice that wisdom, they have been working in a smart and very efficient manner to mobilise domestic resource for their development,” he said.
“Besides increasing our countries’ ownership and accountability, domestic resource mobilisation reduces the volatility associated with outside funding. Now, given the recent adoption of the Sustainable Development Goals and the commitment of
our continent to implement the Agenda 2063, which is Africa’s development blue print, it is equally important to consider how these wider agendas will be financed.”