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The African Union Commission (AUC) and the African Tax Administration Forum (ATAF) have strengthened their cooperation on tax policy and administration, with a focus on improving domestic revenue mobilisation and addressing taxation challenges in hard-to-tax sectors across the continent.
The two institutions reaffirmed their commitment during a meeting between an ATAF delegation led by its Council Chair, Dr Johnston Makhubu, and the AUC Commissioner for Economic Development, Trade, Tourism, Industry and Minerals, Francisca Belobe, at the African Union Headquarters in Addis Ababa, Ethiopia.
The engagement focused on practical African-led solutions to help countries mobilise more revenue, improve tax compliance and strengthen fiscal systems needed to finance sustainable development.
A key issue discussed was the effective implementation of the Agreement on Mutual Assistance in Tax Matters (AMATM), which provides a framework for cooperation among African tax administrations through the exchange of information, assistance in tax collection and joint tax examinations.
The institutions noted that stronger cooperation among tax authorities was increasingly important in tackling cross-border tax evasion, illicit financial flows and aggressive tax practices.
They also highlighted the need to strengthen Africa’s tax treaty networks, with the ATAF Model Double Taxation Agreement identified as an important policy instrument for helping countries negotiate tax treaties that protect their taxing rights and reflect their development priorities.
Belobe also encouraged ATAF to intensify engagement with the private sector, stressing the importance of involving businesses in tax policy and compliance discussions.
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According to the meeting, stronger engagement with the private sector could promote voluntary compliance, broaden the tax base and increase participation in African economies, while greater certainty for taxpayers would also support improved compliance.
The cooperation will further focus on revenue challenges associated with extractive industries and other hard-to-tax sectors, where issues such as valuation, cross-border transactions, specialised contractual arrangements and limited access to relevant information can make effective taxation difficult.
The two institutions also reviewed progress made through their cooperation around the Specialised Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration (STC-FMAEPI).
Belobe welcomed the progress and encouraged further collaboration towards improving tax revenue collection and strengthening national fiscal systems across African countries.
The AUC and ATAF are expected to finalise the renewal of their Memorandum of Understanding and develop a detailed work plan for the coming years.
The renewed framework will provide for coordinated action on tax policy and administration, tax treaty matters, mutual assistance, private-sector engagement and the taxation of strategic and hard-to-tax sectors.
