Tax Us If You Can: Why Africa Should Stand Up For Tax Justice
January 15th, 2011
Tax is the foundation of all civilisations. The act of tracing tax policies and practices reveals the history of the relationship between the ruler and the ruled, state and citizen.
In Africa this relationship can be traced back over millennia. For instance, Egypt’s famed Rosetta Stone, created in 196 BC during the Ptolemaic era, was an agreement granting a tax exemption to priests, and certain reductions to the military and other ruling classes, including traders approved by the king. It was an early example of the special privileges that continue to proliferate across the continent.
Today, 80 per cent of Africa’s exports consist of primary commodities. African governments depend heavily on the resource rents from these commodities but many are exempt from taxation. Tax holidays and other hidden subsidies granted to multinationals in secretive agreements deprive governments and their citizens of significant tax revenues. Similar exemptions to those that once governed trade along the Anu canal in ancient Egypt continue today as foreign traders set up shop in the various Free Zones along Africa’s coastlines where little or no tax is due, or special economic Zones and international Financial Centres along the trade routes that cross the continent.