–Public Finance Strategies to Unlock Finance and Investment in EMDEs
The following is an extract from the Unlocking Investment and Finance in Emerging Markets and Developing Economies (EMDEs) World Bank program
Many countries in West Africa struggle to collect the amount of tax revenues necessary to provide basic services to citizens. Education, electricity and clean water. And citizens have mixed feelings about paying the tax It’s good to pay taxes because I believe that with that we can develop our country improve the roads pay public servants. If there were more oversight that would be good. But sometimes they start building a road and leave it unfinished. I’ve been a taxi driver for years. I have not even been able to buy a piece of land. We’re just paying taxes. But when you stop working the government forgets about you.
In May tax officials from French speaking nations gathered in the May at a conference sponsored by the exchange and research center for leaders of tax administration craft. The World Bank the Togolese tax administration and the French government they came to discuss some of the main hurdles they face. In Togo in other countries for example there’s been tremendous urban population growth and private investment in real estate but tax authorities have trouble collecting property tax leaving more tax burden on others including shop owners and taxi drivers.
The people who build big buildings and rent them we don’t know who they are and they don’t pay taxes. It’s true it’s a situation of tax fairness living force he was serving them because rental income is also taxable. It’s income that escapes taxes. We haven’t been able to tax it. Togo is trying to change that with modernizing its land records. Which are now mostly on paper one objective is to better track property ownership in Cameroon officials are trying to balance the need to attract investors and extractive sectors but also collect the appropriate revenues.
It’s not purely a fiscal challenge. It’s a challenge of balancing the constant need for resources with the need to realize that with tax pressure you can discourage investment and it’s only the investment that allows (resource generation). Kia Fossella like many countries around the world is trying to bring more informal businesses including street vendors but also larger companies into the tax system. Some of that requires convincing taxpayers showing them what they get in return. The government should be accountable. Whatever I pay I should know how it is used where it goes.
So if we manage to have clear accountable procedures for what we collect I think that we will gain the support of a bigger proportion of the informal sector that better understands where the money goes. But these are difficult problems and for Martine Kouda at it has been helpful to discuss with her peers some of the challenges they have in common to learn what has worked in to share what has not. I found that people brought success stories from their own countries and some challenges.
I learned what might not work in my country through the experiences of others. So I will take their guidance. I think it was very enriching to share experiences with the other countries in this session. And citizens hope this tax officials share advice and improve revenue collection that this will also bring better education better roads and better hospitals and a better quality of life in return for their contribution.