Tighten tax on international trade – Government told

The Executive Secretary of the African Tax Administration Forum, Logan Wort, is pressing on African governments to tighten tax on international trade and increase investments in digital tax collection systems.

According to him, this has become necessary due to the gradual shift in the use of technology over the years, which is partly attributed to the Covid-19 pandemic.

Logan Wort spoke to Joy Business after addressing members of the forum at the ongoing annual congress which is seeking to come up with strategies to deal with the revenue shortfalls expected in the implementation of the continental free trade agreement.

“You’ve got to introduce and tighten up your taxes on international trade. You’ve got to tighten up taxes on your digital economy”.

“The digital economy in Ghana has exponentially increased over the last decade by about $3 billion annually, but what is the domestic tax take from there? So, you need to invest in the digitalisation of your tax administration, advance policies for taxing multinational enterprises, and bring more of the middle class into the tax net. This is what the conference will seek to do through well-researched documents from experts and analysts who hails from the continent”, he said.

The 7th Annual Congress is focusing on the Tax and Revenue Implications of the African Continental Free Trade Agreement due to some revenue losses projected for the short term.

It is expected that the aggregate tariff revenues for Africa will decrease with the implementation of the AfCFTA, with some countries to be more affected than others.

This decline in revenue will be moderate in the early years due to progressive liberalization.

However, in the longer term, between 2025 and 2045, the decline will increase from 3% to 9%, according to a projection from the World Bank.

Source: Joy Business News