Harmonise revenue collecting systems in extractive industries between MNCs, Africa - call

By The guardian reporter

Tanzania Revenue Authority (TRA)

Experts and players in the extractive industry have stressed the need to harmonise revenue systems so as to create a level playing field in the extraction of resources from Africa and other developing countries by multi-national companies.

 

This was said by Alfred Mregi, deputy commissioner General, Tanzania Revenue Authority (TRA) at a four-day meeting of experts from developing nations who are gathered here to discuss taxation in extractive industries.

 

For many years, Tanzania as well as other developing nations have been losing much revenues due to conflicting revenue collecting procedures as well as tax administration differences between developed and developing nations, has pointed out.

 

The meeting focuses on the challenges posed by extraction of oil and gas, and in particularly, the so-called ‘resources curse’ affecting poor countries. 

 

The meeting is part and parcel of UN’s efforts towards addressing the issue of giant MNCs that enjoy resources from Africa and other developing countries as they capitalise on the latter’s ignorance on international tax laws. The UN is also making efforts to harmonise all revenue systems to create a level playing field.

 

Mregi said that as a result, African countries have found themselves on the losing end whenever large overseas firms come to invest, since they use tax evading skills supported by claims that Africa is yet to groom a competent working force to manage revenue collection.

 

In response, African countries just stare helplessly as offshore companies plunder the resources dry, he observed.

 

According to Mregi, Tanzania was also caught between ‘a rock and hard place’ because while the country has been working hard to attract Foreign Direct Investments (FDI) as it protects the nation’s natural resources, she has not been keen in enforcing solid measures on tax compliance.

 

Eric Mensha, who is the UN Sub-committee Coordinator, said that they are mandated to consider report on and proposed draft guidance on extractive industries' taxation issues for developing countries.

 

The basis is that it should identify and consider the most pressing issues where guidance from the Committee may most usefully assist developing countries in this area.

SOURCE: THE GUARDIAN