(PHOTO CREDITS: Global Alliance for Tax Justice)

It’s time to put a sharp gender lens on taxation policies and practices and implement tax justice measures that will ensure greater gender equality. And it’s time we made our civil society voices heard for this demand!

By Dereje Alemayehu and Alvin Mosioma

Every year at this time, our members in the five continents carry out different activities to explain how tax justice can finance gender equality, while official delegates discuss women’s rights at the United Nations Commission on the Status of Women (UNCSW).

This year, UN member states were to review the ambitious engagements taken towards women’s rights, in Beijing 25 years ago. It was planned to address the critical issue that not a single country has reached gender equality since Beijing. Understandably, due to public health concerns occasioned by the outbreak of the coronavirus, the much-awaited UNCSW was postponed. The whole event was shortened to a one-day ‘procedural’ meeting on March 9th.

This happened just when activists were readying to head to NYC to challenge UNCSW not to limit itself to rhetoric and lamentations when dealing with the lagging behind of each member state in progress towards gender equality and to address the elephant in the room – the financing of women’s rights! 

(PHOTO CREDITS: Tax Justice Network Africa)

In a world catering to every pleasure and individualistic desire, the banana seems to be the one thing rocking everybody’s socks off. Why else is this common denominator available at roughly the same price in your local supermarket winter to summer, 365 days a year? Is someone getting ripped off to maintain this price? In this blog, we will consider how the low price of bananas works, where women are in the global trade of bananas, and sketch out illicit financial flows within the process.

The global economy and international relations is often considered in gender-neutral language, unless you’re pursuing a specifically gendered issue like the gender pay gap. Yet as captured by Cynthia Enloe, renowned feminist and scholar of international relations, in her delightfully snarky read ‘Bananas, Beaches and Bases: Making Feminist Sense of International Politics‘, gender relations are in fact entrenched in everything created by human beings, even in the international trade of bananas.

In her book (2014) Enloe, asks the question of where women are in the international politics of bananas. She calls on each one of us to ‘exercise genuine curiosity’ about each woman in this international system, whether she is the domestic worker in the CEO’s home, packing crates in a banana warehouse or the grocery-shopping housewife. Feminists are to think about those actors within the global economy system, extending your imagination to ‘those women you have yet to think about.

(PHOTO CREDITS: Courtesy THE EAST AFRICAN)

The recent announcement by the US and Kenya that they will initiate negotiations for a free trade agreement (FTA) has elicited concern within the African trade community.

Although the process, road map and end date of these negotiations remain to be worked out, it suffices that we reflect on possible reasons for this initiative, its ramifications on Kenya’s role as a lead proponent of the African Continental Free Trade Area (AfCFTA) and its legitimacy in light of Kenya’s membership of East African Community’s Customs Union.

While scant detail has been shared, Kenya is presenting the initiative as a proactive action in anticipation of the end of African Growth and Opportunity Act (Agoa). This preferential American legislation under which 39 African countries export a range of products to the US duty free is facing its latest end date in 2025.

Agoa has helped US to become Kenya’s third largest export market after EU and Uganda, accounting for about $400 million — nearly 10 per cent of the country’s total exports.

The second argument has been that Washington has promised Nairobi a graduation to the Millennium Challenge Account (MCA). This is a grant facility created by former President George Bush to reward friendly developing countries which pursue open market and democratic governance reforms.

(PHOTO CREDITS: Tax Justice Network Africa)

Background

The OECD Inclusive Framework on BEPS (‘Inclusive Framework’) has been discussing taxation of transnational corporations and tax challenges arising from the digitalization of the economy. The impossibility of ring-fencing only the digital economy means that this has opened up a more fundamental discussion on the design of the international tax system. The ‘Inclusive Framework’ agreed on a Programme of Work, published in May 2019, that outlined their work on these reforms.

These reforms are being discussed in the Inclusive Framework under two ‘pillars’:

• Pillar 1 opens up the more fundamental question on taxing rights and where corporate profits should be taxed. This discussion is crucial for developing countries who have long raised concerns about the issue of allocation of taxing rights being skewed in favour of developed countries.
• Pillar 2 concerns the question of whether profits of transnational corporations should be subject to some sort of a minimum rate of tax.

On 9th October 2019, under pillar 1, the OECD Secretariat published its ‘unified approach’ proposal which starts to outline a new system for allocating taxing rights. The proposal claimed to combine elements of three proposals which were originally put forward by USA, UK and G24, and were included in the agreed work programme of the Inclusive Framework. In reality, the OECD Secretariat’s proposal unfortunately ignored the central elements of the G24 proposal and has been criticized by academics such as Prof. Stiglitz and Prof. Ocampo, for the reform likely benefitting OECD countries at the cost of developing countries’ interests.

On 8th November 2019, under pillar 2, the OECD Secretariat published its ‘Global Anti-Base Erosion’ (GloBE) Proposal. However, since the proposal still leaves a number of key questions unanswered, it remains unclear to what extent pillar 2 discussions would benefit developing countries. It is also unclear whether this proposal might benefit residence countries (where the companies are headquartered) or source countries (where companies do business).

On 31 January 2020, the OECD Secretariat announced that the Inclusive Framework has now agreed to go ahead with the ‘unified approach’. This is now the basis of negotiations at the OECD Inclusive Framework and no longer just an OECD Secretariat proposal. The G24 proposal, championed by several developing countries within the OECD Inclusive Framework, is now effectively off the table.

Having been built on top of the tax practices within the imperial trading blocs of the 1920s, the international tax system has historically been against developing country interests. The direction of current reforms in the OECD Inclusive Framework will only end up reinforcing this status quo. With the OECD Inclusive Framework mandated by the G20 to find a solution by the end of 2020, it is crucial for developing countries to consider how they respond collectively and strategically this year. It is time for developing countries to look beyond the OECD.

(PHOTO CREDITS: Courtesy THE STAR)

For a long time, the African mining sector was perceived to be an enclaved economy that extracted natural resources to the benefit of the global economy while offering little to advance social and economic development on the continent.

On the contrary, recent mining industry restructuring has fuelled fresh hopes that the sector carries the potential to drive industrialisation in Africa.

On the Global Day of Action that is marked in November yearly, the civil society clearly demonstrated why the extractives industry must be reclaimed from the hands of a few, wealthy and foreign multinational corporations to benefit the communities in Africa.

Speaking in one voice, the civil society successful organised and executed an online campaign themed ‘Campaigning on Tax Justice and Extractives; Our proposed calls and demands’.

(PHOTO CREDITS: Courtesy THE STAR)

Business has evolved tremendously over the last few decades.

Incorporation of technology has brought about increased efficiency, greater convenience, economic development and improved problem-solving. The value-added results have positively impacted operations.

The entrance of new and tech-oriented players has not only resulted in inclusion and disruption but also created an interesting ‘digital economy’ ecosystem. This unprecedented transformation should be good news for governments as they have the potential to grow their domestic resource mobilisation.

However, the revenue authorities have been caught flat-footed in regulation and have not been able to assess, collect and account for revenues from the modern global economy. The current international tax rules are not up-to-date with the technological advancement in the business industry and therefore, need to be re-assessed.

(PHOTO CREDITS: Courtesy THE STAR)

A picture has been making the rounds on social media of a man fetching water in a meshed laundry hamper. The picture must have been taken early in the morning by the demeanour of the man and his long shadow. It shows water running into the hamper and spilling even faster while the man patiently waits for it to fill.

This is a simple illustration of what Illicit Financial Flows (IFFs) do to developing countries as they pursue economic growth. IFFs are illegal movements of money from one country to another in contravention of national and international laws.

Undeniably, Africa desires economic growth and it reaches out for foreign aid but the amount of money lost in the process through IFFs is enormous and increasing. It is estimated that developing countries lose six times more through IFFs than what they receive in Official Development Assistance (ODA). The ODA is government aid designed to promote the economic development and welfare of Third World countries.

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(PHOTO CREDITS: Courtesy THE STAR)

When it comes to minerals, Africa is a land of contrasts. According to a World Bank report, Africa is home to 30 per cent of the world’s mineral reserves, 10 per cent of the world’s oil and 80 per cent of the world’s gas.

Yet, despite such enormous resources, the continent’s poverty rate stands at 41 per cent. And out of the world’s 28 poorest countries, 27 are in Africa, all with a poverty rate above 30 per cent.

While mining countries appear to fare better than other countries abroad, this is not the case in most resource-rich countries in Africa.

Kenya sits on a number of minerals, including gas and oil, that are increasingly being exploited. The country has proven deposits of titanium, coal and gold. The government has also been pursuing the possibility of constructing a coal power plant. Despite these resources, few people have benefited.

(PHOTO CREDITS: Courtesy THE STAR)

Kenyan tax system still has complexities with unfair taxes against women, East Africa Tax and Governance Network has said.

The lobby group has established that there exist marked inequalities brought about by factors including consumption patterns, property rights and asset ownership and the tax regime bringing about the injustice. 

The gender bias has also included procedure for filling income taxes or the differences in income tax reliefs.

“Generally, women spend most of their income on consumption of food and other basic services, as opposed to men, hence they carry a greater VAT burden especially on commodities such as milk, bread and wheat flour,” EATGN said.