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Technology eases the burden of tax compliance on business – Report
According to the latest paying taxes report from the World Bank group and PWC, the use of technology, by business and government, in tax compliance is driving continued simplification and reduction in the burden of tax compliance on businesses. On this back drop, how can the public sector harness the continent's technological advancement in the past decade to improve the revenue mobilization? Titus Mukora, Partner at PwC joins CNBC Africa for more.
Tue, 21 Nov 2017 10:33:19 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Technology-driven simplification and reduction in tax compliance burdens
- Balancing tax base expansion with ease of doing business
- Challenges in lowering total tax contribution rates amid budget deficits
According to the latest paying taxes report from the World Bank group and PwC, the use of technology, by business and government, in tax compliance is driving continued simplification and reduction in the burden of tax compliance on businesses. The implementation of online filing systems has significantly reduced the time and effort required for tax filings, payments, and returns in Kenya. This trend is not unique to Kenya but is being observed across Sub-Saharan Africa and globally, as revenue authorities embrace online filing systems for improved efficiencies and ease of compliance. Titus Mukora, a Partner at PwC, highlighted the positive impact of technology on tax compliance in a recent interview on CNBC Africa. In the interview, Mukora discussed the shift towards leveraging technological advancements to enhance revenue mobilization and improve the ease of doing business. He emphasized the importance of striking a balance between expanding the tax base and ensuring a conducive environment for businesses. The transcript of the interview delves into key aspects of tax compliance in Kenya and the potential for further improvements beyond technology. Mukora explained that the total tax contribution is a crucial metric that reflects both the tax base expansion and the ease of doing business. Countries with lower total tax contributions are generally ranked higher in terms of ease of doing business, pointing to the delicate balance between increasing revenue and supporting business growth. The interview also touched upon the correlation between tax reforms and improvements in the ease of doing business. Mukora highlighted Kenya's progress in both areas, with the country moving up the rankings in recent reports. The ease of paying taxes directly influences the overall doing business indicator, indicating a symbiotic relationship between tax compliance and business environment. Additionally, the interview shed light on the variations in tax rates and total tax contributions among medium-sized companies in Kenya and South Africa. Mukora noted that while there is room for improvement in tax rates, government's budget deficits pose challenges to reducing the total tax contribution rate. He pointed out that Kenya's effective total tax contribution rate has remained stagnant, indicating the complexity of lowering tax burdens without alternative revenue sources. Overall, the interview emphasized the transformative impact of technology on tax compliance and the importance of holistic approaches to enhance revenue mobilization and support business growth. As countries like Kenya continue to embrace digital solutions, the future of tax compliance holds promise for efficiency, transparency, and economic development.
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