WINDHOEK, April 27 (Xinhua) -- Namibia is hosting the African Tax Administration Forum (ATAF) Workshop aimed at providing insights and updates on the best practices in value-added tax (VAT) administration and compliance to improve revenue generation from the extractive industry in Africa.
Speaking at the opening of the two-day workshop Thursday, Deputy Executive Secretary of ATAF Mary Baine highlighted the importance of the extractive industry for Africa's economic growth and development.
She said that Africa's natural resource wealth does not translate to significant benefits for countries, and added that Africa has the potential to harness the value chain, fiscal regimes, and taxation in the extractive sector to propel nations toward prosperity, alleviate poverty, and create sustainable development.
According to Baine, the workshop will focus on the complexities of VAT administration and compliance in the extractive sector, including input and output VAT, the treatment of capital expenditures, and the implications of cross-border transactions.
She emphasized that the extractive sector presents unique challenges and opportunities in the realm of VAT administration and compliance, which makes it essential for governments and businesses to adopt sound and clear VAT policies.
"VAT has become an increasingly vital source of revenue for African governments, often accounting for a significant portion of their total tax revenues," Baine said, citing the African Tax Outlook, which states that VAT has contributed the highest revenue at an average of 30 percent of total tax revenue in African countries.
"Therefore, improving VAT administration and compliance in the extractive sector is crucial to unlocking the full revenue potential of these industries," she said.
ATAF is a continental body that provides a platform for cooperation among African tax authorities and continuously provides support to African countries to improve Domestic Resource Mobilization through the publication of technical resources, provision of training, tailor-made technical assistance, and workshops.
The organization has recently published three major technical guides consisting of Suggested Approach to Drafting Qualified Domestic Top-up Tax Legislation, VAT Digital Toolkit for Africa, and Future of Resource Taxation. ■
