NAIROBI, 23 June 2017– As the world commemorates the annual Public Services Day, civil society organisations across Africa and beyond are calling on governments to ensure that sufficient resources are directed towards public spending on basic services. Through a week-long campaign dubbed the Global Week of Action on Tax Justice for Public Services, these organisations- through a multiplicity of activities- have been drawing linkages between resource mobilisation (through mobilisation and collection) and public finance management specifically with regards to public services. The creation of this connection is essential particularly in establishing how progressive tax systems are vital to financing quality public services and accelerating decent work and wages.
Governments generate the bulk of their revenues from taxes levied on goods and services in their jurisdictions. Investigations in recent years have proven that corporate entities often pay little to no taxes in many countries by exploiting gaps in the domestic and international tax systems. Through the use of tax havens, transfer pricing and misinvoicing, multinationals are getting away with millions in tax revenues. The High Level Panel on Illicit Financial Flows (IFFs)* estimates that Africa loses approximately USD. 70 billion each year through capital outflows.
A report by the East Africa Tax and Governance Network shows that a great portion of the tax burden falls on Pay as You Earn (PAYE) and Value Added Tax (VAT) as compared to Corporate Tax. The former are mainly paid by workers and end- consumers and as governments impose greater tariffs for the two levies, the amount of disposable income for the average household reduces considerably. This means that the system is skewed in favour of multinationals who already earn more.
“Though tax is largely seen as the seal on the socio-economic pact between a government and its people, there is a lot of disinformation with regards to what taxpayers ought to expect as their right. Public services have the potential to create more equal societies by countering social and economic inequalities and ensuring the fulfilment of basic human rights. In the same breath, tax is meant to ensure provision of basic services to all and redistribution of wealth and reduce poverty,” said Alvin Mosioma, Executive Director of Tax Justice Network Africa (TJNA).
According to research by the UNESCO Institute for Statistics, almost 60 percent of youth between the ages of about 15 and 17 in sub-Saharan Africa are not in school. This is coupled with challenges such as access to electricity and potable water, availability of books and average class sizes. The availability of qualified teachers is another problem, with seven out of every ten countries facing an acute shortage of tutors. Access to potable water is also a big challenge for many with approximately 319 million people in Sub-Saharan Africa without access to reliable sources of drinking water, according to the World Health Organisation. Another 695 million live without access to proper sanitation, exposing them to great risks of contracting diseases such as cholera and typhoid.
16 years after signing of the Abuja Declaration and only a few African countries have implemented the recommendations of what was to act as a guide for reforms in the healthcare sector across Africa. The 15% budgetary allocation is still a far-fetched concept across the continent, leaving millions of people without access to basic quality healthcare services.
The odds are worse for the girl-child with an estimated nine million girls who will never see the inside of a classroom. With lack of safe public transport, well-lit streets and alleys, child and elderly care that reduces women’s burden of unpaid care work as well as access to reproductive health and gender-based violence services, women and girls suffer most when public services are revenue-starved, especially those living on the fringes of society. In Sub-Saharan Africa alone, women and girls lose 40 billion hours per year collecting water; the same as an entire year’s labour in all of France.
Despite being signatories to many international agreements on reform, African governments are yet to walk the talk on the various commitments made, such as the recommendations made by the Mbeki-led High Level Panel on IFFs. As the next frontier of development Africa needs to invest heavily in ensuring that public services as well as it workforce are sufficiently provided for, both for the present and future generation. The establishment of a global tax body that will establish and enforce a fair tax system.
Notes to editors:
- Tax Justice Network Africa (TJNA) is a Pan-African organisation established in 2007 and a member of the Global Alliance for Tax Justice. TJNA engages in various activities that are aimed at promoting public awareness regarding tax issues in Africa. During the week of action on tax justice for public services, the Network through its members and partners, will be co-organising a series of activities in Burundi, Ghana and South Africa.
- The Global week of action on Tax Justice for Public Services is an initiative of the Global Alliance for Tax Justice. The Alliance is a growing movement of civil society organisations and activists, including trade unions, united in campaigning for greater transparency, democratic oversight and redistribution of wealth in national and global tax systems.