Logan Wort leads the African Tax Administration Forum (ATAF) as executive secretary. As economic growth accelerates in the region, more multinationals have expanded their operations into Africa.
This raises a number of tax challenges for businesses in a region where tax administration and policy is still developing. The ATAF helps to bridge the gap. Its growing influence and role in developing and providing support to African countries places it in ITR’s Global Tax 50.
Wort reflected on that past year in a conversation with ITR and discussed what is on the horizon for 2021.
ITR: What has been your highlight over 2020, and why?
Logan Wort: We have had a number of highlights in terms of the impact we set out to achieve. At the global level is the intensity of our work on the global framework for the taxation of the digital economy.
ATAF seems to be the only organisation who writes responses that are technical analyses, as well as looking at the impact for developing countries. These have been used and looked forward to by developing countries in other regions.
Our work is having an impact on the UN Tax Committee (UNTC). ATAF has been providing support to the African delegation of the committee. We think the agenda of the UNTC has shifted to a broader tax policy that is more reflective of the global framework agenda.
Additionally, the African Union Commission has for the first time really put tax on the agenda; there are preparations for the African Union ministerial meeting dedicated to illicit financial flows and the taxation of the digital economy. Global discussions are great but there has not been continental discussions on these issues. That has been an important highlight.
The ATAF publication on drafting digital services tax legislation has come at a time when the discussion at the OECD has not reached a conclusion and African countries have been given measures to put in place. And of course COVID-19 - it is not a direct highlight but we’ve had conversations with heads of tax administrations in African countries, discussing the impact, looking at immediate response possibilities, and understanding the challenge.
It was an exciting and busy year.
ITR: What was the biggest challenge to overcome?
Logan: The biggest challenge as an organisation, but also for different countries, was COVID-19. The new working methods and working environments have shown the importance of investment in IT.
One of the biggest challenges other than the economic impact, in our experience and certainly in my experience, was that those countries that have invested in IT for their tax system have been those that have come out better.
One of the ways in which we dealt with this is that we conducted continental-wide interventions with heads of tax administrations, attended by 30 countries, where we shared key interventions and types of measures. Countries such as South Africa, Uganda, Kenya, and Mauritius played a huge role in developing these instruments.
Based on that experience, we were able to produce guidance for member tax administrations in response to the pandemic.
Those interventions were crucial in helping our members overcome some of these challenges.
I think we also have to continue work on broader industrial resources. We produced a paper in 2020 on the roadmap on the future of resource taxation.
Finally, there is more work to do through cooperation with various stakeholders at all levels. We have to continue to find revenue sources, especially in the wake of COVID and revenue losses.
ITR: What will define 2021 for you? What are you most looking forward to, and why?
Logan: Some very specific things will define 2021. Firstly, a global and continental post-COVID recovery programme. In our area, post-COVID revenue mobilisation and tax systems recovery will be a focal point. They played a crucial role, not just in revenue collection but also distribution of healthcare and social services.
Also, the finalisation of Inclusive Framework work on the taxation of the digital economy, because it must agree on the taxing rights issue. The discussion at the Inclusive Framework is not dealing with it - now it is a scramble for who can get the most. If it does not do that, it risks the validity and credibility of the intuitions involved.
Third would be the consolidation of the African Union’s attempt to create a political platform for tax policy and administration that can plug into the Inclusive Framework.
Finally, we believe that a fundamental part of our efforts must be a close cooperation of African agencies. That means we see a strategic role for the African Union, the wider African region, the African Development Bank,and ATAF in leading tax administration and reform. It is important for sustainable growth.
I would add that ATAF has been requested by its members to start looking at a digital platform for tax administration for the whole continent. That is something that is going to be crucial to the sustainability of tax administration.
ITR: Will there be any other challenges?
Logan: Post-COVID priorities and economic need will be one of the biggest challenges, and linked to that, which is not exclusive to Africa, social impact. Economies will change and we will possibly see an increase in political instability.
Part of the priority we will need to manage will be an investment in tax systems. There is a massive deficit and governments do not fully understand it.
Traditionally taxation has been a conversation for a few. I find that, in any conversation, whether social or a corporate environment, if you are the tax person, the conversation tended to shift away from you. However, in the last five years, the conversation of taxation is changing to be more inclusive.
The tax conversation is becoming more technical. Part of the work that ATAF champions is thought leadership, we do that through our African Tax Research network.
It is not about just collecting and filing, it is a broader conversation of understanding and contributing.
