IMF holds talks on improving tax revenue mobilization in sub-Sahara Africa

The International Monetary Fund (IMF), says it is currently holding discussions in Kenya with senior tax officials from over 40 African countries on how countries in sub-Sahara Africa can improve on their tax revenue mobilization.

According to the IMF, the discussion is in context of its ongoing technical assistance, through which the Fund works to improve expertise and technical capacity of its members, in particular low-income countries. It is also to respond to the G-20 initiative on enhancing revenue mobilization in developing countries.

A statement from the IMF on March 21, 2011 said the talks provide an opportunity for tax experts to exchange experiences about what has worked well in enhancing revenue mobilization and improving equity.

Commenting, Carlo Cottarelli, IMF’s Director of Fiscal Affairs said : “Fair and efficient tax revenue systems are essential to the long-term sustainability of public finances in low-income countries,” adding, “Effective revenue collection can unlock vital resources for African countries to tackle the root causes of poverty and promote their long-term development in an equitable and transparent manner.”

To enhance its capacity to deliver technical assistance on revenue mobilization and natural resource management, the IMF said two new topical trust funds financed by multiple donors are due to begin operating in May 2011. These will support some US$55 million in technical assistance over the next five years related to Tax Policy and Administration and Managing Resources Wealth.

Tax revenues in sub-Saharan Africa tend to be low relative to national income while needs for public spending are high and according to Mark Plant, Deputy Director of the IMF’s Africa Department, enhancing tax structures and revenue collection systems is a priority for many countries across this region.

The IMF said new regional technical assistance centers are scheduled to open in Ghana to serve other parts of West Africa in May this year.

By Ekow Quandzie