Barbara Bako, Abuja.
The African Union Commission (AUC) and the African Tax Administration Forum (ATAF) are intensifying efforts to strengthen Africa’s domestic revenue systems as countries across the continent seek more sustainable ways to finance development.
The two institutions reaffirmed their commitment to deeper cooperation on tax policy and administration during a meeting between ATAF Council Chair, Dr Johnston Makhubu, and AUC Commissioner for Economic Development, Trade, Tourism, Industry and Minerals, H.E. Francisca Belobe, at the African Union Headquarters in Addis Ababa, Ethiopia.
The engagement centred on practical measures that can help African countries mobilise more revenue from within their economies, improve tax compliance and strengthen the capacity of national tax authorities.
The renewed focus comes as governments across Africa continue to face significant financing pressures, making stronger domestic resource mobilisation increasingly important for funding public infrastructure, social services and other development priorities.
The AUC and ATAF identified greater cooperation among African tax administrations as critical to addressing revenue leakages, particularly those linked to economic activities that cross national borders.
A key instrument discussed was the Agreement on Mutual Assistance in Tax Matters (AMATM), which provides a framework for tax authorities to exchange information, assist in recovering taxes and conduct joint tax examinations.
Greater use of such mechanisms could help tax authorities identify undeclared income and transactions across jurisdictions while improving their ability to respond to cross-border tax evasion and illicit financial flows.
The meeting also placed emphasis on Africa’s tax treaty framework, with the ATAF Model Double Taxation Agreement highlighted as an important instrument for protecting countries’ taxing rights.
The model agreement is designed to support African governments in negotiating tax treaties that reduce the risk of unfair revenue losses while taking into consideration their economic and development interests.
For the AUC, stronger tax cooperation must also involve the private sector.
Belobe encouraged ATAF to deepen engagement with businesses, noting that meaningful dialogue between governments and taxpayers could improve voluntary compliance and contribute to a broader tax base.
Such engagement, the discussions recognised, could also provide businesses with greater certainty about their tax obligations while helping governments design more effective and practical tax policies.
Another area of concern is the taxation of extractive industries and other hard-to-tax sectors.
The institutions noted that complex cross-border transactions, difficulties in determining the value of transactions, specialised contractual arrangements and limited access to relevant information can make it difficult for governments to collect the revenues due to them.
They therefore agreed that continued technical cooperation would be necessary to help tax administrations address these challenges and improve revenue outcomes.
The AUC also acknowledged progress made through collaboration around the Specialised Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration, while encouraging further efforts to strengthen tax collection and national fiscal systems.
The latest engagement is expected to result in a renewed institutional framework between the two organisations.
The AUC and ATAF will work towards finalising the renewal of their Memorandum of Understanding and developing a detailed work plan for the coming years.
The renewed framework is expected to cover tax policy and administration, mutual assistance, tax treaty matters, private-sector engagement and the taxation of strategic and hard-to-tax sectors.
The broader objective is to translate regional tax cooperation into stronger national revenue systems, giving African countries greater capacity to mobilise resources domestically and reduce vulnerabilities associated with external financing.
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