Changes to Tax Systems

by Developed Africa 23. June 2014 09:00

Dependency of aid is always a topic of much discussion when it comes to African countries, what moves can be made to reduce this dependency?

In 2010...Burundi's tax take was 300 billion Burundian francs ($240m). It has almost doubled since, to 560 billion francs."

This increase in revenue was all thanks to the changes made by the new tax agency Office Burndais des Recettes (OBR) run by Kieran Holmes. And the changes made by this autonomous agency are ones that could be made across the continent in order to increase the amount of revenue countries receive from tax, making them slowly but steadily less dependent upon international aid.

The changes made included the replacing of anyone working in the old revenue division who could not successfully pass finance exams, and who were really in it for the money and corruption; by ensuring that only qualified people worked for the agency, Holmes made the first step towards changing the corrupt systems in the revenue service.

The government has tried to make bills less burdensome, by lowering corporate income tax from 35% to 30% and introducing a value-added tax (VAT) to broaden the tax base."

And it is these simple changes that caused the rise in tax payments in Burundi, with predictions being made that if this pattern were to continue taxes would cover expenses by as early as 2017, removing the need for international aid. And these are changes that other African nations could make, especially the switch to autonomous tax agencies which can hopefully cut out a large chunk of the corruption that is currently stopping the correct level of tax being collected.

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