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How the EAC can leverage technology to meet revenue targets
It has been noted that tax administrations not only in the region but across the continent need to embrace technological solutions to ensure they meet revenue targets and enhance compliance amongst the tax base. Economic Analyst Odhiambo Ramogi joins CNBC Africa for more.
Mon, 30 Nov 2020 10:07:39 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
- Countries like Kenya, Uganda, and Tanzania are embracing digital platforms for tax services, enhancing operational efficiency and transparency.
- Technological innovations, such as mobile payment solutions and internet banking, are being used to streamline tax processes and improve revenue collection.
- Challenges remain in including the informal sector in the tax net and bridging the digital divide to ensure equitable access to online tax services.
Tax administrations across the continent are increasingly recognizing the need to adopt technological solutions to meet revenue targets and foster compliance. The Eastern African Cooperation (EAC) is no exception to this trend. Economic Analyst Odhiambo Ramogi shed light on the importance of leveraging technology in tax administration processes in a recent CNBC Africa interview. With countries such as Kenya, Uganda, and Tanzania making strides in digitalizing their tax systems, the landscape of revenue collection is evolving. These advancements aim to streamline operations, expand the tax base, and ensure compliance, especially in the wake of the COVID-19 pandemic.
In Kenya, the government has been at the forefront of digitizing its tax services. Taxpayers can now file returns online, reducing the need for physical visits to tax offices. This shift towards digital platforms has significantly enhanced efficiency in tax administration. Similar efforts are being observed in Uganda and Tanzania, reflecting a regional push towards modernizing tax collection methods. By incorporating mobile outlets and internet banking, taxpayers have more convenient ways to fulfill their tax obligations. These technological innovations not only simplify payment processes but also improve transparency and accountability in revenue collection.
Amid the challenges posed by the pandemic, tax agencies in the region are leveraging technology to adapt to the new normal. The use of digital channels for tax transactions has become more prevalent, enabling remote access for taxpayers. By embracing online platforms and mobile payment solutions, tax authorities are enhancing their operational efficiency and addressing the decline in tax revenues caused by the economic downturn. The focus is on expanding the tax base, ensuring compliance, and optimizing revenue collection through innovative technological solutions.
While technological advancements have been made in tax administration within the EAC, there are still areas that require improvement. One key aspect is the inclusion of the informal sector in the tax net. Informal businesses and wealthy individuals often evade taxes, leading to a disproportionate burden on salaried employees and formal enterprises. Addressing this issue requires a concerted effort to enforce tax compliance across all segments of society. Additionally, there is a need to bridge the digital divide to prevent certain groups from being disadvantaged by technological barriers. By investing in infrastructure and promoting digital literacy, tax authorities can ensure equitable access to online tax services.
The integration of technology in tax administration within the EAC presents both opportunities and challenges. While progress has been made in digitalizing tax processes and broadening the tax base, there is still room for improvement in tackling tax evasion and promoting inclusive tax compliance. By leveraging technological solutions effectively and addressing existing gaps in revenue collection, the EAC can enhance its overall fiscal performance and meet revenue targets in a more sustainable manner.
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