Maravi

IMF urges govts to prioritise tax reforms

IMF urges govts to prioritise tax reforms
By Gift Chanda
Wed 23 Mar. 2011, 04:00 CAT

FAIR and efficient tax revenue systems are essential for long-term sustainability of public finances in low-income countries, says the IMF. IMF director of Fiscal Affairs Carlo Cottarelli said sub-Saharan African governments need to prioritise tax policy reforms to stimulate an efficient and dynamic private sector.

He said an effective revenue collection can unlock vital resources for African countries to tackle the root causes of poverty and promote their long-term development in an equitable and transparent manner.

Cottarelli noted this in a statement released yesterday during the conference held in Kenya for sub-Saharan Africa on improving tax revenue mobilisation.

The two-day conference has attracted heads of national revenue collection authorities, finance ministry staff, deputy ministers and representatives of regional bodies involved in tax affairs from sub-Saharan Africa. Kenya’s finance minister Uhuru Kenyatta also noted that better tax reforms are necessary to speedily enable governments generate additional revenue needed to finance better public service.

He stated that quick action would help grow the private sector, an area key to creation of jobs and improving the living standards of the African people.

"Many tax authorities in sub-Saharan economies still contend with common challenges such as lack of adequate capacity that plague tax systems of developing countries," he noted.

Kenyatta stated that other challenges like the complex tax structure arising from many amendments, weak tax administration and corruption, and the low investment in ICT to promote efficiency and reduce compliance costs needed urgent attention.

"These challenges present an opportunity for reforming Africa’s tax systems to better facilitate the private sector and raise adequate resources to finance priority development," he stated.

Kenyatta called for special focus on tax administration to help raise additional resources required to finance priority social and economic programmes in areas of human and infrastructure development, necessary for sustained high economic growth and development.

The conference is aimed at providing an opportunity for senior government officials in charge of tax policy and administration to exchange experiences about what has worked well in enhancing revenue mobilisation and improving equity.

Labels: IMF, TAX EVASION, TAXATION

posted by MrK @ 4:55 AM