The African Union Commission (AUC) and the African Tax Administration Forum (ATAF) are working to strengthen cooperation among African countries on taxation as part of efforts to increase government revenue, improve tax compliance and reduce losses from cross-border tax evasion and illicit financial flows.
The two continental bodies agreed to deepen their institutional partnership and develop more practical African-led approaches to domestic resource mobilisation following a high-level meeting at the African Union Headquarters in Addis Ababa, Ethiopia.
The meeting brought together an ATAF delegation led by its Council Chair, Dr Johnston Makhubu, and the AUC Commissioner for Economic Development, Trade, Tourism, Industry and Minerals, Francisca Belobe.
The discussions focused on how African countries can make better use of existing tax agreements and technical tools to collect more revenue and strengthen their fiscal systems without relying excessively on external financing.
A major area of discussion was the Agreement on Mutual Assistance in Tax Matters (AMATM), which provides a framework for tax authorities across Africa to cooperate in areas such as the exchange of taxpayer information, recovery of taxes and joint tax examinations.
The agreement is particularly important as businesses and financial transactions increasingly operate across national borders, making it more difficult for individual countries to tackle tax avoidance and evasion on their own.
Through greater cooperation, tax authorities can obtain information held in other jurisdictions, assist one another in recovering taxes and conduct joint investigations where necessary.
The AUC and ATAF also discussed the need to strengthen Africa’s tax treaty network, with the ATAF Model Double Taxation Agreement serving as a guide for countries negotiating tax treaties with other jurisdictions.
Double taxation agreements are designed to prevent the same income from being taxed twice, but the African bodies said treaty arrangements should also protect the revenue interests of African countries and reflect their development needs.
For many African countries, the challenge is not only collecting taxes but ensuring that tax agreements do not unnecessarily limit their ability to raise revenue from economic activities taking place within their territories.
Commissioner Belobe also called for stronger engagement between tax authorities and the private sector, saying businesses should be part of discussions on tax policy and compliance.
She said closer engagement with businesses could encourage voluntary compliance, widen the tax base and support greater participation in African economies.
The discussions also recognised that businesses are more likely to comply with tax obligations when they have greater certainty about tax rules and can engage with authorities on policy and implementation issues.
Another area of concern is the taxation of extractive industries and other sectors that are difficult for tax authorities to monitor effectively.
The sectors can involve complex contracts, cross-border transactions, difficulties in determining the correct value of transactions and limited access to information required by tax authorities.
These challenges can make it difficult for governments to determine the correct amount of tax payable by companies operating in areas such as mining and other extractive activities.
The AUC and ATAF are therefore seeking stronger cooperation and technical capacity to help countries address these revenue gaps and ensure that economic activities within Africa contribute appropriately to public finances.
The two organisations also reviewed their cooperation through the African Union’s Specialised Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration (STC-FMAEPI).
Commissioner Belobe welcomed the progress made through the partnership and called for further work aimed at improving tax collection and strengthening national fiscal systems across the continent.
The broader objective is to translate continental tax policies, agreements and technical instruments into measures that can produce tangible results for individual African countries.
For governments facing pressure to finance infrastructure, healthcare, education and other public services, stronger domestic revenue collection could provide additional resources while reducing dependence on borrowing and external funding.
The AUC and ATAF are now expected to finalise the renewal of their Memorandum of Understanding (MoU) and prepare a detailed work plan covering their cooperation in the coming years.
The renewed agreement is expected to provide a framework for coordinated action on tax policy and administration, tax treaties, mutual assistance between tax authorities, private-sector engagement and the taxation of strategic and hard-to-tax sectors.
The partnership comes as African governments continue to search for ways of raising more domestic revenue from their economies, particularly as many countries face competing demands for public spending and limited fiscal space.
By strengthening cooperation between tax administrations and making it easier for countries to share information and assist one another, the AUC and ATAF believe African countries can improve their ability to collect taxes that are legally due to them.
The two institutions are expected to continue working together to ensure that continental tax instruments are not merely policy documents but are applied in ways that improve revenue mobilisation and strengthen Africa’s fiscal capacity.