DAR ES SALAAM: EXPERTS have suggested that Tanzania needs to adopt a UN Tax Convention to get a fairer and more balanced approach to international tax cooperation and have its voice heard.
It is expected that the domestic resources mobilisation will increase together with control of tax evasion, as a result, more funding will go to the implementation of the development projects and social services.
The tax experts from different institutions made the recommendations during a breakfast debate organised by the Norwegian Church Aid (NCA) in collaboration with the Policy Forum.
The meeting in Dar es Salaam, on Friday, was part of the launching of their advocacy campaign for the UN Tax Convention. The convention proposal was discussed in the United Nations General Assembly (UNGA), leading to a Resolution in November 2022. The African nations, including Tanzania are vocal advocates of the convention.
NCA Country Director Berte Marie Ulveseter argued that the convention is a critical initiative that aims to shape the future of global tax policies and ensure that they work for all people, especially the most marginalised.
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Ms Ulveseter elaborated that for many years, international tax rules have been shaped by a small group of wealthy countries, with little regard for the voices of developing nations.
This has resulted in a system that disproportionately benefits the rich and powerful while leaving poorer countries struggling to generate the revenues they need to invest in essential services for their citizens.
The new report by the Tax Justice Network, published November 19, this year shows that 500 billion US dollars is lost to tax evasion—twice as much as the aid provided by wealthy countries. The report also analyzes how multinational corporations and wealthy individuals use tax havens to avoid paying taxes.
The result is 492 billion US dollars in lost tax revenue annually.
“The UN Tax Convention would help ensure that multinational corporations, financial institutions and wealthy individuals are held accountable for their tax contributions, closing the loopholes that have allowed for tax avoidance and evasion on a massive scale,” she pointed out.
Tax law assistant lecturer from the Saint Augustine University of Tanzania (SAUT), Ms Norah Kawiche commented that the world is currently well connected and when it comes to issues of tax every country has its jurisdictions and laws for taxing.
Ms Kawishe said when multinational companies shift their capital from Tanzania, it is hard for the country to tax them because it lacks legal power.
“Now, why we need UN Tax Convention. We need it to be able to cooperate with other countries in exchanging information about tax evasion, tax avoidance, and building our capacity of how to collect tax on exported revenues,” she explained.
