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ANNEX 1: COUNTRY PAGERS ASIA
BANGLADESH General context Bangladesh is a densely populated delta-country with around 157 million inhabitants. It is endowed with a number of natural resources, such as natural gas, limestones, clay, arable land and timber. Its industries include, among others, garments, tea, jute, pharmaceuticals, ceramic, leathers, paper, engineering, electric cables, skill labors, fish and frozen vegetables. According to the World Bank Bangladesh GDP was estimated at around 150 billion USD in 2013 with an annual growth of 6.0%.15 In the same year, the Government debt amounted to almost 19% of its GDP.16 It ranks 142 out of 187 on the UNDP Human Development Index, with a slight improvement in its value between 2012 (0.554) and 2013 (0.558). The unemployment rate was estimated at 5% in 2011.17 Poverty is also deep and widespread with almost half of the population living on less than one dollar per day. Approximately 31.5% of its population falls below the national poverty line in 2010.18 The geographical setting of Bangladesh coupled with climate change makes it highly prone to natural disaster. Tax policies and practices Bangladesh’s tax performance is still unsatisfactory, especially when compared to other countries at a similar stage of economic development. The tax-to-GDP ratio is estimated to be between 8,7%19 in 2011 and 11.6% in 2013-2014.20 Over 55% of its total revenue comes from indirect taxes, which is considered high. Though the direct tax contribution to the total revenue has increased over time, the current rate is still too low. Tax policies in Bangladesh should benefit everyone. In practice, however, the tax policies (especially the way indirect tax is used), does not favor the poor and is not transparent, accountable and progressive. 1% of the population controls 90% of private properties but only contribute 26% to the total tax revenue. The poorest represent 10% of the population and contribute 74% of the indirect taxes. The tax system is also centralized at the national level, with local and regional elected bodies having no involvement in the development and implementation of the tax system. Currently there is no combined civil society voice for an accountable and equitable tax policy and fight against tax corruption. Based on in-country research and field work, the Bangladesh CRAFT team concludes that the main bottle necks currently are poor tax administration, outdated tax policy and weak tax practices.
15 http://data.worldbank.org/country/bangladesh?display=default 16 http://www.tradingeconomics.com/bangladesh/government-debt-to-gdp 17 http://www.indexmundi.com/g/g.aspx?c=bg&v=74 18 http://data.worldbank.org/country/bangladesh?display=default 19 http://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS 20 Bangladesh Economic Review Report 2014 on http://www.mof.gov.bd/en/budget/14_15/ber/bn/Index_&_Indicators_bn_2014.pdf.
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Bangladesh is increasingly focusing on internal resource mobilization for its socio-economic development and meeting budgetary expenditures. Over the years, the Gov-ernment of Bangladesh has initiated several administrative and policy reforms regarding the tax system. The year 2013 was marked by a major positive change in the tax policies, reflected in the introduction of a “people friendly tax policy” implemented by the national government. Sushasoner Jonny Procharavizan (Campaign for Good Governance – SUPRO), the lead organization in Bangladesh, is involved in the further development of this policy. Recently, the National Board of Revenue (NBR) has taken a few initiatives, including automatic tax systems and widening direct tax to ensure pro-people oriented services. Although these developments are encouraging, more steps need to be taken.
CRAFT Country strategy Until now CRAFT Bangladesh has published two research reports; one baseline survey on the tax system and the tax gap; one about people's tax perception. Based on the knowledge gained in these reports Trainer of Trainers (ToTs) and grassroots campaigners were trained. The tax campaign, which focused on the link between fair taxation, prosperity and progress, reached over 60 thousand people across the country. In addition, advocacy meetings were organised with the Finance Minister, Members of Parliament, NBR officials (both at national and local level), economists, academics and the media to discuss the outcomes of the research and related policy recommendations. There are two main policy and practice changes that can be linked to these meetings. Firstly, the initiative of the NBR to digitize the tax collection process, ensuring greater tax coverage. Secondly, the government declared the importance of having a direct tax based budget for the first time. Unfortunately, the implementation of progressive tax rules is still poorly enforced.
SUPRO/OXFAM – Policy Dialogue with civil society and the Bangladesh Parliament, January 201521 Strategy 2015-2018 The strategy in Bangladesh focusses on achieving the following key improvements:
- People with the ability to pay tax should be included in the tax net; - Gaps in the tax system should be closed; - Government revenue should be collected equitably and transparently;
21 Policy dialogue with the Parliamentarian CAUCUS of National Budgeting and Planning. This event was con-ducted inside of the National Parliament House of Bangaldesh on 24 January, 2015.
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- Collected government revenue should be increased and used for reducing systemic inequalities.
In order to achieve these goals the CRAFT Bangladesh team will focus on advocacy and campaigns to generate broad-based political pressure for reforms and by actively engaging a broad public constituency around fair taxation. In addition we will update and renew previous studies to make sure our evidence-based advocacy is grounded on the most recent tax data. We will revise the current training program based on feedback from the Trainer of Trainers (ToT) and grassroots campaigners that were trained in the previous phase. This process will be supported by national and international experts and institutes in order to develop a solid understanding and foundation on tax justice issues among SUPRO's 600 network members. This will result in increased capacity and confidence of the ToTs which will lead to more collective voices and pressure on duty bearers and policy makers in changing tax policies and practices. Additionally, grassroot voices will be strengthened, raised, documented and published in the media. Furthermore, policy advocacy is planned to target, amongst others, the Finance and Planning Minsiters, Standing Committee Members, MPs, and the Audit and Accounts Department. PAKISTAN General context With more than 180 million inhabitants, Pakistan is the sixth most populous country in the world. It ranks 146 out of 187 countries on the UNDP Human Development Index and has only seen a slight improvement of its value between 2012 (0.537) and 2013 (0.537). According to the World Bank Data22, in 2013, its GDP was estimated at 232.3 billion USD, with an annual growth of 4.4%. The Net Enrollment Rates in education have been increasing in Pakistan but still lag behind other South Asian countries. Infant and under five mortality rates show a similar story. Gender disparities persist in education, health and all economic sectors. Pakistan has one of the lowest female labor force participation rates in the region. Pakistan is ranked as one of the lowest spenders on education and health in the region (at about 2% of GDP). Pakistan’s poverty gains of over the past decade have been impressive but may be difficult to sustain. The country saw a decline in poverty trends, with the poverty rate falling from 34.5 percent in 2001/02 to an estimated 17.2 percent in 2007/08 and 12.4% in 2011.23 While Pakistan’s overall level of inequality remains steady and relatively low compared to other developing countries, some of the volatile border regions and some rural areas within other provinces have a higher than average level of poverty. Pakistan continues to struggle with relatively high rates of unemployment (6.6%),24 inflation and insecurity. Adding to the instability is the ongoing conflict within the country. Tax policies and practices In Pakistan, the middle and poor classes are bearing the heavy brunt of indirect taxes, which are nearly 75% of total revenue collection. This strong reliance on indirect taxes is directly contributing to rising poverty as poor farmers and the working class are among the worst affected. Simultaneously, those individuals with big incomes and wealth are not being subjected to taxes on income or wealth, as well as other progressive taxes like capital gain tax, gift tax and estate duty. The tax system of Pakistan, which was progressive until 1990, was converted into a regressive regime in 1991 with the
22 http://data.worldbank.org/country/pakistan 23 http://data.worldbank.org/country/pakistan 24 http://www.indexmundi.com/pakistan/unemployment_rate.html
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introduction of certain withholding provisions in the Income Tax Law (most of which are retained even in the new law promulgated in 2001) and VAT-type tax in the Sales Tax Act, 1990. The result is that during the period 1991-2013, the tax burden on the poorest households is estimated to have increased by 17 percent, while it declined by 25 percent for the richest households. Overall, the tax revenue (% of GDP) of Pakistan was around 11.1% in 201325 and 9.5% in 2014 (FBR, Pakistan) CRAFT Country strategy The Fair Taxation work by Oxfam and its partners in Pakistan is relatively new. We have been gradually building our experience in working on tax and budgets in Pakistan, but only in 2014 was this work formally connected with the broader work of the CRAFT program. In June 2014, one of the Oxfam Pakistan Country Office staff members joined in the Naivasha Strategy Meeting in Kenya and ties between the Pakistan tax advocacy work and the global Oxfam inequality campaign (Even it Up) were strengthened during other global meetings and online sessions. In general, the Pakistan fair tax efforts have focused on evidence based advocacy/campaigning to influence revenue and expenditure policies. Its overall goals is poverty reduction and to ensure that the public sector generates sufficient revenues through equitable and progressive taxation to deliver essential services to all citizens, including the poorest and most vulnerable. So far two research studies have been conducted; “Abolishing the pro-rich tax regime for right to live”; and “Sparing the Rich, Hurting the Poor: Pakistan’s unfair Taxation and the ‘Inflation Tax’”. In addition, the peoples’ perspective on reforming the tax policy framework has been analysed, which also provides for background material for the drafting of policy guidelines. The broad objective of the work is to effectively engage with the Government of Pakistan to build a collective, evidence-based, consensus. A recent success was the work that was done with the National Tax Reforms Commission, a 21 member high level sovereign state institution, to reform the tax system in a holistic way. The Commission agreed to incorporate a number of key points as mentioned above in its agenda along with a framework for collaboration, which was conceptualized by Oxfam. In addition, it has invited Oxfam to serve on the Commission and its two subcommittees (1. rationalizing the direct and indirect & Statutory regulatory orders (SRO) mechanism in the Pakistan taxation system and 2. phasing out the concessionary and pro rich exemptions regime in Pakistan). This will give Oxfam a great opportunity to advocate for a pro-poor tax system in Pakistan. Strategy 2015-2018 One of the most serious problems in Pakistan is the pro-rich regime of tax exemptions/ SRO's through which a large number of wealthy people remain outside of the tax net. As such, the phased abolishment of SRO's and the broadening of the tax base will be one of the main focus areas of our Pakistan policy advocacy and campaigns. The whole program is based on continuous research and building capacity of the tax justice coalition partners including CSOs and Business Chambers to advocate for tax justice, take a position on critical themes and influence for change. Currently, the tax justice coalition comprises of two lead partners, two business chambers and around 20 small scale CSOs. While in most countries we work with one CRAFT country lead partner in Pakistan we will work with two as they each have their own entry point and expertise.
25 http://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS
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AFRICA (SUB-SAHARAN)
GHANA General context Ghana has seen tremendous progress in development and poverty reduction in the last two decades. It currently ranks 138 out of 187 on the UNDP Human Development Index, with a value of 0.571 in 2012 and 0.573 in 2013. Ghana knows a stark level of inequality, particularly between people living in the south and north and between men and women. Over 70 % of people in the northern regions live on less than $1 a day, compared to the national average of 28%. Ghana has substantial natural resources, such as gold, timber, diamonds, bauxite, manganese and fish. Although Ghana is richly endowed with mineral resources, many local communities are not reaping its benefits and suffer from the social and environmental costs associated with the extractive industry. Its industries include mining, lumbering, light manufacturing, aluminum smelting and small commercial ship building. According to the World Bank data26, in 2013, its GDP was estimated around 48 billion USD with an annual growth of around 7%. The government debt as a percentage of GDP reached the 50%27 in the last years. Approximately 25% of its population falls below the national poverty line in 2012. The unemployment rate amounted to 4,6%28 in 2013. Tax policies and practices Overall tax revenue as percentage of GDP is around 15%29 in the last years. Taxation has over the past few years gained momentum in Ghana. One of the reasons for this is the attainment of the status of middle income country. With this status, donor countries are shifting their focus and prefer to support ‘less privileged’ countries. With fewer options left for the country, all efforts are being garnered to maximize revenue through taxation. For this reason, Civil Society Organisations (CSOs) in Ghana have also joined hands to campaign on tax matters especially on a fair, progressive, transparent and accountable tax system. Analysis of the trends in tax policies and practices in Ghana shows that tax policies remain largely revenue driven with a focus on indirect consumer-based taxes. This is partly because these are easy to collect and do not have pronounced political backlashes. It also is also due to the fact that Ghana has recently sought financial help from the International Monetary Fund (IMF). The IMF has always insisted on lower tax rates on income and profits as a strategy for attracting foreign direct investment. In November 2014, while the country was negotiating with the IMF for a bail-out, the government of Ghana announced the introduction of a 17.5% value-added tax on petroleum products in addition to the already wide range of existing indirect taxes. Another main issue is corruption, which tends to reduce the tax potential of the country and make the country focus more on the indirect taxes, which are less vulnerable to corruption if supervision is strong. CRAFT Country strategy CRAFT partners’ research on the taxation system in Ghana provided an outline of the main bottlenecks and challenges in the current tax system. It also assessed the capacity of the Ghana Revenue Authority (GRA), examined the potential of more progressive taxation practices and considered the linkages between taxation, good governance and Civil Society Organization (CSO) participation. So far, the training component in Ghana
26 http://data.worldbank.org/country/ghana?display=graph 27 http://www.tradingeconomics.com/ghana/government-debt-to-gdp 28 http://data.worldbank.org/indicator/SL.UEM.TOTL.ZS/countries/1W-GH?display=graph 29 http://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS
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was limited in outreach but very relevant to the CSO staff members involved. Through a full-week training participants were taught the basics and technical aspects of taxation and tax laws in Ghana as well as tax practices and advocacy on tax justice issues. The training also served as the foundation of several published newspaper articles. Other participants have posted topical comments on tax on the internet. In addition, the trainings contributed to alliance building and creating linkages between CSOs and tax officials. Strategy 2015-2018 Our research has shown that Ghana has a high potential for the use of direct tax or taxes on income, wealth and property, however, the political focus on Foreign Direct Investment (FDI), the promotion of private sector growth and employments, and the ongoing corruption are standing in the way of development in this direction. We are planning to undertake a more in-depth and technical analysis of the impact of tax concessions, corruption and strong focus on indirect taxes and seek to compute the amount of lost revenue as a result of these practices. Furthermore, we will continue our training activities and expand it to more CSOs while making use of tax practitioners as resource persons, enabling a dialogue between participants and tax officials and indirectly also educating tax officials on unethical tax practices. The trainings will also include sessions on corruption in tax administration. Through our civic education programmes we will provide analyses of new tax policies and taxes in the form of Information Briefs which will be distributed to the Ghanaian public. Our main lobby targets will remain the Tax Policy Unit of the Ministry of Finance and the Ghana Revenue Authority (GRA). However, we strive to cooperate with other CSOs on tax issues and create joint advocacy approaches through which we engage with policy makers. We will continue to work with the Tax Justice Platform in Ghana through education and training in order to equip them with knowledge on advanced tax issues and analytical skills to increase pressure on the government and tax policy makers regarding current tax issues that need to be addressed. MALI General context Mali is one of the worst performing countries on the UNDP Human Development Index, placed at country number 176th out of 187, scoring 0.406 in 2012 and 0.407 in 2013. According to World Bank data30 in 2013, its GDP was estimated around 11 billion USD with an annual growth of 2.1%. In the same year, the Malian public debt as a percentage of GDP reached the 31%31. The unemployment rate amounted to 11%32 in 2014 and it was estimated that in 2010 almost half of its population fell below the national poverty line (World Bank data). For more than a decade Mali has been in the process of decentralization, making local communities the main actors of development. Recently Mali has gone through a deep crisis, not only economically but also politically, when the Touareg movement occupied the northern regions. The peace protocol signed during the summer of 2013 and the following elections allowed the country to democracy and restore peace and stability in the northern region. Increased and fair tax revenues are now more needed than ever as at this time since Mali is primarily dependent on its own resources. It is endowed with a number of natural resources, such as gold, phosphate, kaolin, salt, and limestone. Its main industries include food processing, construction, phosphate and gold mining.
30 http://data.worldbank.org/country/mali 31 http://www.indexmundi.com/mali/public_debt.html 32 http://www.tradingeconomics.com/mali/unemployment-rate
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Tax policies and practices Overall, the tax revenue as percentage of GDP was around 15%33 during the past years. Tax justice in Mali is undermined by a high level of tax exemptions to multinationals, a poor functioning of the tax system based on self-assessment, a low taxation of the informal sector, and a widespread perception of lack of accountability. The tax administration does not efficiently communicate with its citizens. Research, conducted under the CRAFT program, afforded a much better insight into the strengths and weaknesses of the Malian tax system. On one hand, a constant adaptability to the national and international environment and a sincere will to modernize some tax services are positively seen. However, on the other hand, tax exemptions to multinational companies, tax evasions, a weak accountability, and a (intended) constant miscommunication between citizens and tax officials weaken the Malian tax system. Important sectors, such as telecommunication, transport and cotton are now under free zones regulations. Following International Monetary Fund (IMF) recommendations, Mali’s government decided to reduce the royalty rate applied to gold mining companies from 7 to 3 percent in order to encourage investment in this sector. The government wants to modernize its administration and provide services to the tax payer, but so far this is not sufficiently reflected in the tax architecture and the tax system is characterized by fraud and evasion. Mali’s tax system is based on declarations and far-reaching powers in the tax authorities to independently decide on applicable tax declarations. The main sources of revenues are Value Added Tax (VAT) by far, and to a lesser degree, corporate and income taxes. Taxation statistics are alarming. Only 20% of the companies properly pay all their taxes, while the informal sector and all its micro subsistence businesses contribute about 4 times more to the tax revenues, through paying VAT. Export oriented activities are ex-empted from all taxes, duties and taxations of a fiscal and customs nature, for a 30 years period. Mali’s current fiscal regime set for the gold mining sector consists of a mixed taxa-tion system based on royalties, a profit tax and depletion allowance on profits.
CRAFT Country strategy December 2012 CRAFT started with an important study on mining impacts on social and economical development of women in mine and oil sites. This research contributed to a better understanding of fair taxation and enabled “Publiez Ce Que Vous Payez Mali (“Publish What You Pay“- PCQVP) to conduct an efficient information campaign on taxation policy. As a result, tax administration services committed to involve taxpayers in the tax practices by installing a genuine dialogue between local elected officials and taxpayers, improving taxpayers’ access to financial information and considering their concerns. Meanwhile, through powerful awareness and information campaigns, local population committed to pay their taxes. CSO members of the PCQVP Mali, various local officials and the Coordination of NGO’s and Women’s Associations of Mali (CAFO) received training on fair taxation. This resulted in a rising in consciousness on fair tax issues, together with a better understanding of the fundamental role of all stakeholders. A protocol has also been signed between councils of commune III and VI of the Bamako District concerning the support to PCQVP to mobilize tax revenues and facilitate the dialogue between the municipalities and their population. Concerning civic education, two open meetings on fair taxation were organized and two radio programs were produced, which was also covered by the State television (ORTM) and the national daily Newspaper (l’Essor). Furthermore, advocacy work has focused on State technical services, members of parliament, academics, economic operators, media, actors of the civil society, and
33 http://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS
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government officials. Success was seen with elected officials and operators as it led to an open and constructive dialogue between tax authorities and citizens. Additionally, an alliance has been created between the Budget Monitoring Group (GSB) and the Coalition of Alternative Debts and Development (CAD-Mali) regrouping 129 Malian CSOs.
PCQVP-Mali Tax Justice Advocacy Workshop,
September – October 2014
Strategy 2015-2018 In the coming years, strengthening the role of civil society to take part in the development, implementation and evaluation of tax policies and practices will be key to the work in Mali. We envision a strong involvement of women and youth in tax processes and we will make sure they are increasingly targeted in our training activities. Future studies are also needed to develop proposals and recommendations to manage the local development, improve the dialogue between citizens and tax administration services as well as elaborate tax reforms. More training is necessary to enlarge the target groups, foster a common vision of the actors on fair taxation and maintain the reflection and actions made by the actors. Also, PCQVP will undertake civic education activities to: build an outreach campaign (meetings, debates in the educational area, and citizens’ days on fair taxation), develop civic training modules, mobilize citizen participation and create discussion and sharing of ideas. Besides, PCQVP recommends maintaining a real communication policy between the different actors. The future implementation of an advocacy strategy will contribute to detect strengths and weaknesses of the tax policy and propose further improvements; inform citizen of their taxing responsibilities and rights together with monitoring their tax payments; create representative space to reinforce civil society participation in the establishment of tax policies; and demand accountability of tax administration and local communities. Finally, PCQVP will strive to further create cooperation with other CSOs which are more influential and experienced at the national level. They will create national and sub-regional alliances on fair taxation and budget transparency. They also should become a member of the International PCQVP coalition. NIGER General context Niger is West Africa’s largest nation and one of the poorest countries in the world. It is placed at the bottom of UNDP’s Human Development Index at place 187 (out of 187), scoring a value of 0.335 in 2012 and 0.337 in 2013. According to the World Bank data34, in 2013, Niger’s GDP was estimated at 7.41 billion USD with an annual growth of around
34 http://data.worldbank.org/country/niger
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4%. During the same year, the Government debt as a percentage of GDP amounted to 17.7%.35 The country’s economy relies on agriculture as well as on livestock. A culturally diverse society, Niger’s population is concentrated in the South and Southeast of the country, where the climate is most suitable for agriculture. Fishing and market gardening happen along the 550 kilometers of the river Niger. The private sector is critical to Niger’s economy. The presence of extractive industries creates opportunities for the country to generate income. However, the tax system is an inherited system dating back to colonial times, and tax payers only know little about it and are not sufficiently mobilitzed to claim their rights. Niger is a country functioning mainly on external funds which also undermines national investment. Tax policies and practices Overall, the tax revenue as percentage of GDP was around 26.2%36 in 2013. High levels of corruption and various tax exemptions to big companies have only exacerbated the already poor functioning of the tax system, which leads to increased inequalities, a lack of social trust and weak citizen participation. This leads to difficulties for Small and Medium-sized Enterprises (SMEs) which want to enter the market. However, in 2013, a new fiscal code has been developed and the way of taxing extractive industries is now the new topic of discussion. Even though some political initiatives are taken to formalize the informal sector, lack of transparency and strategic guidance slows down the whole process of development. CRAFT Country strategy Research highlighted that Niger’s tax system is unfair and also poorly understood by tax payers. Tax administration staff is weak in terms of size and efficiency and corruption is on the rise. The most important problem highlighted is the double taxation system that does not benefit the country. Research further recommended investigating how communities can mobilize taxes and address basic social service issues. Réseau des Organisations pour la Transparence et l’Analyse Budgétaire (ROTAB - Network of Organizations for Transparency and Budget Analysis) conducted training on budgeting (taking into account gender differences) for advisers, journalists and members of local NGOs. This training contributed to a better understanding of work time and paid work, which are areas where women are generally undervalued and discriminated. Strategy 2015-2018 Previous budget analyses indicated the relevance of further research on tax issues in Niger as part of the study on inequalities within the framework of the Oxfam Even It Up campaign. Further research should diagnose problems and solutions to improve the financial system in increasing investment and promoting equality. Also, more studies should be done concerning mining taxation and some actions should be taken in terms of gender equality. One of the main concerns is an increased budget for basic social services, and hence, the efficiency of Niger’s tax system should be further analyzed. ROTAB needs training on mining and oil taxation, and need budget analyses skills with a focus on extractive industries. Alternative Espaces Citoyens (AEC) requires training on taxation to understand taxation tools, and how to create context analyses with regards to diverse social groups. For ROTAB, the struggle is promoting local good citizenship and to develop more experience in the municipalities. People are willing to pay as long as it serves for constructing infrastructures and ensuring a better transparency and accountability of the government. To guarantee that, there is a need to train local elected officials, create public forums and stimulate media attention and citizen mobilization. It is necessary to build a consistent policy advocacy and improve the agreements between the government and the civil society. AEC also prescribes to organize round tables and
35 http://www.tradingeconomics.com/niger/government-debt-to-gdp 36 http://www.indexmundi.com/niger/taxes_and_other_revenues.html
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work with members of Parliament. Finally, some alliances will be sought, such as alliances between trade unions in tax sectors, authorities, local elected officials, customs, the Treasury, the Judiciary Association, and the Bar Association. At the international level, strategic alliances can be developed with organizations interested in this field such as Tax Justice Network – International (TJN-I), PWYP or International Budget Partnership (IBP). Nevertheless, there is a crucial need of experts in the areas of mining and oil law since even the State has this kind of expertise. Finally working together with other stakeholders in a fair taxation network would amplify the impact of our work. NIGERIA General context Nigeria is a country with a population of over 170 million people and is richly endowed with natural resources, such as petroleum, natural gas, tin, iron ore, coal, lead and zinc. Its main industries include crude oil, coal, rubber, palm oil, wood, textiles, construc-tion materials, food products, chemicals, printing and steel. Nigeria is now the largest African economy, making it the 26th biggest economy in the world with a GDP of $ 521 billion USD, with an annual growth of 5.4% according to 2013 data.37 In the same year, the Government debt amounted to 19% of GDP.38 Nigeria currently ranks 152 out of 187 in the UNDP Human Development Index, with a value of 0.500 in 2012 and 0.504 in 2013. Although its economy is relatively big, 33,1% of the Nigerian population fall below the national poverty line.39 Nigeria hosts various other contradictions:
Though the 6th largest producer of oil in Organization of Petroleum Exporting Countries (OPEC), Nigeria imports fuel and even encounters regular fuel scarcity.
Prior to the 1960 oil boom, Nigeria was amongst the world’s leading agricultural producers and a net exporter of products including cocoa, groundnut, rubber, cot-ton, hides and skin. Yet today Nigeria is a net importer of raw materials and food, and currently faces the risk of food crisis.
The number of elected women in politics, at less than 7%, remains the lowest in West Africa. The country has however made strides in appointing women to key positions never before held by women, including the strategic ministries. Nonetheless, there are concerns about achieving the Milennium Development Goals (MDG) goals with human, women’s and children’s rights still widely violated.
Tax Justice Training for Nigeria Tax Administration staff, February 2014.
37 http://data.worldbank.org/country/nigeria 38 http://www.tradingeconomics.com/nigeria/government-debt-to-gdp 39 Worldbank, July 2014
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Tax policies and practices Unfortunately, the tax administration system in Nigeria is characterized by a low capacity and low level of enforcement as well as is suffering from leakages arising from corruption of tax officials, under assessments, under-filing, and under-reporting. The Tax to GDP ratio in Nigeria is currently 14%.40 With oil tax constituting 73% of government revenues, Nigeria is largely dependent on extractive revenues. However, the uncertainty of international prices resulted in identified vulnerabilities that revealed the unreliability of resource related revenues. Hence, there is renewed emphasis on taxation as part of new efforts at diversifying revenue sources. This of course has the risk of impoverishing the poor masses if the tax system is not fair, equitable, transparent and accountable. A policy for the collection of tax from the informal sector is lacking, resulting in a wide tax gap and general low levels of tax compliance while high levels of tax compliance are seen especially among the formal sector workers in the public service. At the sub-national level, there is personalization of tax collection, use of illegal entities, poor collection practices, including coercion and poor remittance, accounting and tax administration practices. The arbitrary use of tax incentives and waivers, tainted by cor-ruption due to lack of transparency, also bring losses to the federal coffers. Recently, the Federal Ministry of Finance has commenced a participatory process of establishing a Presumptive Tax Regime to effectively tax the informal sector, while Nigeria’s Joint Tax Board (JTB) has commenced the process of harmonizing the various (about 85) different taxes levied across the federation to avoid multiple taxation and criminalizing the collec-tion of taxes by non-statutory bodies. The introduction of a Tax Identification Number (TIN), which allocates a number to an individual as a condition for participation in certain economic activities, has brought previously excluded persons into the tax net. Although not a policy yet the Nigerian government is planning to streamline the use of tax incen-tives and waivers. Additionally, due to the dwindling revenue collected from the extractive sector, the Nigerian government is planning to tax luxury goods such as private jets, yachts, alcoholic beverages and expensive cars. This is likely to be translated into policy with the 2015 annual appropriation Act.
Tax Justice Training Manual
40 Nigeria National Bureau for Statistics 2014
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CRAFT Country strategy During the first phase of the CRAFT program in Nigeria, many outputs were delivered. A publication and dissemination of a Baseline Study on the Nigerian tax system was delivered, including a thorough tax gap analysis and a study on the perception of taxes among citizens and their satisfaction with state service delivery. Also, two policy briefs were produced on Maximizing tax from the Extractive Sector and Expanding the Tax base in the Informal Sector in Nigeria. Additionally, a national platform on fair taxation was established, the Tax Justice & Governance (TJ&GP), together with Oxfam in Nigeria, Actionaid Nigeria and Christian Aid and other local NGOs. The platform hosted a forum of Pan African civil society during the African Union Finance Ministers meeting held in Abuja in 2014 as well as the World Economic Forum on Africa held in Abuja in May 2014. Strategy 2015-2018 The research conducted under the CRAFT program in Nigeria highlighted that the country’s tax policies and practices are especially problematic for the informal sector. As part of our 2015-2018 program activities, Oxfam is planning the development of a documentary using Onitsha and Aba (two areas with a high level of market economy/informal sector activities) as case studies to showcase what is happening in the sector and build credible data for local campaigns on tax justice. Further, we would like to offer two different training programmes on tax research for evidence based advocacy as well as a training on campaigns and citizen mobilization. The first training is essential as Nigerian CRAFT stakeholders have a limited level of expertise on research and taxation. The second training is needed in order to educate CRAFT stakeholders about undertaking strategic campaigns against abusive use of tax incentives and to combat illegal and unfair tax practices. As part of our civic education campaign, we plan to work more closely with various platforms at both the national and state level, and we are planning to set up 17 state levels platforms in 2015. Furthermore, as part of our policy advocacy work, we will also reach out and build alliances with labour movements, trade associates, and strengthen these groups at the state level to undertake advocacy work to promote policy changes and establish grievance mechanisms between tax payers and the revenue authorities. SENEGAL General context Senegal is one of the most stable countries in West Africa, but this stability cannot hide the poverty that prevails. More than 9 million of its 14 million inhabitants (UN, 2014) live below the multidimensional poverty line, of which 41% live in extreme poverty. Senegal recorded an unemployment rate of 10%41 in 2012. It ranked 163rd out of 187 countries in the UNDP’s Human Development Index, scoring 0.484 in 2012 and 0.485 in 2013. According to World Bank data, in 2013, the GDP of Senegal was estimated at 15 billion USD with an annual growth of 4%.42 In the same year, the Government debt to GDP reached the 30%.43 Its economy is dominated mainly by peanut farming, fishing and services. The agricultural sector – the largest provider of jobs and resources – is going through difficulties because of a lack of modern agricultural equipment. As a result, the consumption needs of the population are not met and the country is heavily dependant on imports of basic foodstuffs such as rice.
41 http://www.tradingeconomics.com/senegal/unemployment-rate 42 http://data.worldbank.org/country/senegal 43 http://www.tradingeconomics.com/senegal/government-debt-to-gdp
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Tax policies and practices Senegal’s tax revenue as percentage of GDP averaged around 19%44 between 2010 and 2012. The country has high income tax rates (up to 50%) and moderate corporate tax rates (up to 30%). Indirect taxes have long been the mainstay of Senegal’s tax system, with import duties by far the most important. The CRAFT program mainly aims to strengthen the capacity of CSOs to challenge the authorities and advocate effectively for a pro-poor tax system. This is done in the context of a tax reform where a new general tax code has been created and became effective on the 1st of January 2013. The new code highlights various improvements: development of tax expenditures by eliminating or reducing as much as possible tax incentives, unification of tax legislation in one single code and computerization of the tax return. Despite government efforts to establish fair taxation policies, research revealed institutional weaknesses, such as a lack of control of the money collected, strained relations between administration and taxpayers and unsuitability of international tax policy. These weaknesses encourage tax evasion and avoidance. Senegal’s public revenue structure has also been mapped out and showed how its budget is mainly fuelled by fiscal resources whereas non-tax resources are quantitatively and qualitatively low. Some revenue generating sectors are also poorly taxed, like most agricultural and commercial activities. Senegal’s tax administration has a monopoly on expertise and its powers are not controlled. Since Senegal’s domestic tax law is very complex and incomprehensible for ordinary citizens, people are not very much involved in the development of tax policies. Mining resources, until recently disregarded by most people, are currently an emerging topic. CRAFT Country strategy Aside from the research, a training lead by the Autorité de Régulation des Marchés Publics / Authority of the Regulation of Public Procurement (ARMP) was organised with around 50 people and composed by two international training sessions on fair taxation and a training session on money-laundering. Moreover, a civic education campaign reached around 150 people directly and 3,000 members of the partner. As a result of this campaign, diverse activities have been conducted. Amonst others, two sessions between local CSOs and tax experts were held and two panels on the impact of the new general tax code were organized, including a debate on the Senegalese Radio and Television (RTS) on the new general tax code with the Director General of Taxes. Finally, a debate was initiated on mining taxation and the President decided to get involved. Besides, in terms of policy advocacy, the Forum Civil, our partner, led an advocacy campaign in over 80 branches across the country on the topics of community-based tax justice and the National Convention of Women and Youth. Strategy 2015-2018 Future research is needed to better show the tax injustices in Senegal and to strengthen civil society actors. Furthermore, we need to continue monitoring the tax code’s enforcement and raise citizens awareness on the code’s benefits as well as their tax responsibilities. In the coming years, two kinds of training will be held: one to reinforce the ability of CSOs to challenge the government to effectively advocate with the authorities, and one composed to reinforce the ability of the parliamentarians to effectively work towards a fair and pro-poor tax system. Other training sessions will be organised at different stages with different actors such as parliamentarians, CSOs, private sector, local elected officials and journalists. These sessions aim to form the national and local stakeholders on the general tax code, the principles of fair taxation and the mechanisms of monitoring and evaluation of the tax policy. Policy advocacy activities are planned,
44 http://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS
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such as workshops with parliamentarians and local elected officials in mining zone, roundtables and panel discussion including radio and television broadcasts on tax discrimination and abuse that will be diffused through community-based radios. Campaigns targeting local communities will be launched to help them mobilizing their resources and raise their awareness on tax. Future alliances are sought with the network of parliamentarians, local communities and networks of economic journalists. UGANDA General context Uganda is a landlocked country located in East Africa with a population of about 37.5 million. It has a population growth rate of 3.2%, which is amongst the highest in the world. It currently ranks fairly low on the UNDP Human Development Index, 164th out of 187, with a value of 0.480 in 2012 and 0.484 in 2013. According to the World Bank data, in 2013, the GDP of Uganda was estimated around 22 billion USD with an annual growth of around 6%45. In the same year, the Government debt to GDP reached the 31%46. Uganda has low unemployment rates, as from 2010 to 2012, the unemployment rate amounted to only 4.2%47. However, latest Worldbank and Uganda Government data indicates a high (but declining) poverty rate, estimating that in 2009 almost 25%,48 and in 201249 almost 20% of its population was living below the national poverty line. The north of Uganda was terrorized by the Lord’s Resistance Army (LRA) for 20 years since the 1980s, forcing hundreds of thousands of people from their homes, destroying trade and livelihoods. The region is now attempting to recover from this terror. Pastoralist communities in the northeast have also suffered from years of neglect and an unfettered flow of arms through the porous borders with Sudan and Kenya while in the mountainous southwest climate change is posing serious threats to people’s livelihood. Although Uganda has made steady progress in the reduction of poverty (a drop in the incidence of poverty from 39% in 2002/2003 to 24.5% in 2009/201050), these gains have not been distributed fairly and evenly.51 Tax policies and practices Overall, the tax revenue as percentage of GDP is relatively low compared to the East African region (13% in 2012). Well aware that this situation is not sustainable, the government of Uganda has aimed to raise this ratio by 0.5% each year. Unfortunately, so far this has been going really slowly. The Ugandan tax regime remains heavily oriented towards consumption taxes (VAT and excise duties) to the detriment of personal and corporate income taxes, which only account to 27% of tax revenues. As there currently is no mechanism in place to prevent the most economically vulnerable individuals to get overly affected by VAT, a highly inequitable situation has resulted where the poorest are most affected by taxes. Taxation in Uganda is still perceived by both elite and common citizens as complex and an issue best left to experts. Debates around taxation are not widespread with very limited involvement of citizens in the formulation and implementation of tax policy. Many Ugandan citizens consider tax revenue as
45 http://data.worldbank.org/country/uganda 46 http://www.tradingeconomics.com/uganda/government-debt-to-gdp 47 http://www.tradingeconomics.com/uganda/unemployment-rate 48 http://data.worldbank.org/country/uganda 49 Poverty Status Report, November 2014. On: http://www.finance.go.ug/index.php?option=com_docman&task=cat_view&gid=19&Itemid=7 50http://www.socialprotection.go.ug/pdf/Policy%20publications/Poverty,%20Vulnerability%20and%20Inequality%20in%20Uganda.pdf 51http://www.socialprotection.go.ug/pdf/Policy%20publications/Poverty,%20Vulnerability%20and%20Inequality%20in%20Uganda.pdf
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governments’ money and therefore do not see it as their ‘own’ property for the public good. As a result, the tax system suffers from many deficiencies at bot national and regional levels. Currently, unfair and vicious tax collection methods also disproportionately tax the poor and vulnerable. Tax revenues are structurally falling short as a result of corporate tax avoidance, tax evasion and capital flight, which are all widespread in Uganda. Because proper checks and balances at the governmental level are missing, many corporations have been able to use gaps in the existing tax regime for tax evasion and capital flight practices. As a result, Uganda is struggling with an appalling tax revenue gap and budget deficits resulting from failure to meet revenue targets. This has also severely undermined the state’s capacity to deliver essential services to the people. Finally, the limited capacities of the Civil Society Organizations (CSOs) and the limited involvement of citizens in formulating tax policies have to date prevented the emergence of a strong coalition advocating for the elaboration of a transparent fiscal policies based on equitable and progressive taxation methods. CRAFT Country Strategy The CRAFT program in Uganda is implemented at both the national and local level. The overall objective of CRAFT is to contribute to a more democratic, accountable and responsive state in Uganda, through enhancing the capacity of civil society to advocate for a transparent, efficient, accountable and progressive tax system, that would prevent the uncontrolled outflow of resources and widespread tax evasion and corruption, tackle inequality and reinforce pro-poor policies and practices. This objective has again been divided in the following three sub-objectives: 1) Strengthen CSOs and citizen analysis and engagement on inequality, tax avoidance, evasion and capital flight policies and inadequate tax policies and practices; 2) Mobilise CSO and citizens to engage and participate in tax policy and budget processes at all levels; 3) Consolidate and strengthen the tax justice alliance and taskforce to develop and propose innovative tax policy proposals which promote friendly and fair tax practices at all levels.
Civic Education Materials used in Uganda
Strategy 2015-2018 CRAFT Uganda has placed 4 overarching goals at the centre of its country strategy for the period 2015-2018.
- Through research and analysis tax policies to close loopholes and gaps on inequality, avoidance, evasion and capital flight are promoted and advocated for and adopted by policy makers and key stakeholders.
- Through joint advocacy and campaigning, millions of Ugandans are participating and influencing tax policy and budget processes at local and national level for fair taxation and better public service delivery.
- Key policy makers (senior government staff, Members of Parliament, politicians) at national and local level and regional and global bodies are engaged in discussions about the harmful effects of unfair and ineffective tax policies and practices, through legislative engagement and joint advocacy campaigning
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- Alliance Building – Establishing the national tax justice alliance and mobilizing it to organize joint advocacy and campaigning activities at all levels
AFRICA (MENA)
EGYPT General context Egypt’s status as a lower middle-income country overlooks a reality of extensive poverty. About 30 million Egyptians live beneath the poverty line (25% of the population), and two million people live on less than one dollar a day. According to World Bank data the Egyptian GDP was estimated at around 272 billion USD in 2013with an annual growth of 2.1.52 In the same year, the Government debt amounted 80% of the GDP and the unemployment rate reached the 13%.53 Egypt is endowed with natural resources including petroleum and natural gas, but also resources such as iron ore, phosphates and limestone. Its industries include among others textiles, tourism food processing and hydrocarbons. Politically, Egypt has gone through extremely turbulent years since the Arab Spring in 2011, after which the country has undergone huge changes. Since the revolution, there is neither a clear government public finance policy nor any long term economic vision. The government is predominantly focused on attracting international loans, which all come with their specific strings attached. In order to qualify for a (IMF) loan, controlling the budget deficit through increased taxation has taken the precedence over the welfare of citizens. The country currently ranks 110th out of 187 countries in the UNDP Human Development Index, with a score of 0.681 in 2012 and 0.682 in 2013. Tax policies and practices Overall, Egypt’s tax revenue as percentage of GDP is around 14%54. Since 2012, the Egyptian government proposed several major amendments to the tax system. Various tax rates were increased – among which income tax and general sales tax – with the poor sections of society bearing the heaviest burden. Though income taxes were made more progressive, this mainly counts for the low and middle income classes as progressivity stops at a relatively low income level. CRAFT Country strategy Due to Egypt’s unpredicible political climate and negative environment for civil society, the CRAFT program is currently not implementing activities in the country. We don’t expect implementation will be possible in 2015. However, we are confident that the firm foundation that was built over the past few years will stay present for the program to build on further once it becomes possible to continue with our work on the ground. Nonetheless even without active project, the Egyptian Centre for Economic and Social Rights (ECESR), the Egypt lead partner will continue to be part of the CRAFT group. They will take part in knowledge sharing, will join us in International CRAFT Strategy Meetings and will be in the Advisory Group for the Fair Tax Index. We will continue to monitor the situation closely and when opportunities arise we hope to pick up activities as soon as possible.
52 http://data.worldbank.org/country/egypt-arab-republic 53 http://www.tradingeconomics.com/egypt/ 54 http://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS
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MOROCCO General context According to the World Bank data55, in 2013, the GDP of Morocco was estimated at around 104 billion USD with an annual growth of 4.4%. In the same year, the Government debt to GDP amounted the 60%56. Morocco recorded an unemployment rate of 9% approximately in 2012. Unlike other African countries, the percentage of the Morrocan population beneath the national poverty line is relatively low and amounted to around 9% in 200757. Morocco is currently listed 129th out of 187 on the UNDP Human Development Index, with a score of 0.614 in 2012 and 0.617 in 2013. In response to the wave of revolt and change which touched the Arab world in 2011, the constitutional monarchy of Morocco introduced constitutional reform. Launched by King Mohammed VI and approved by a referendum in July 2011, which seeks to reduce the monarchy’s power in the legislative and executive branches, and to establish the supremacy of international law over national law, as well as the principle of gender equality in political participation. The reforms contain high ambitions for democratization and developing the rule of law in Morocco, but their application has met with some problems. Morocco’s economy is based on small and medium-sized enterprises, tourism and agriculture. For several years now the economy has been liberalized to attract foreign investments. But the gap between urban and rural areas, traditional social structures and conservative cultural values are still slowing down the opening up of the economy. Tax policies and practices Overall, the tax revenue as percentage of GDP was estimated at 24.5%58 in 2012.The tax administration has a major strategic role in the economic and social development. However, even if the tax administration is strong, it is poorly accountable, not transparent and its relationship with citizens is weak. Thus, it is positioned at the core of the modernization politically desired. The recent political events opened the perception of the tax system. The new Constitution of 2011 stated that public services should be attentive to their consumers and follow up on their grievances. However, the reality is still far from the ideal image of citizenship that the CSOs have, due to political, sociological and administrative reasons. Tax evasion and tax exemptions are seen both in the private and agricultural sector, which can potentially undermine rural development. CSOs have furthermore pointed out the increasing debate between professionals about the informal sector and tax evasion. They drew attention to the insecure status of the citizen toward the tax legislative process, the lack of access to information, the weak communication of the tax administration, and the difficult relationship between the tax administration and taxpayers. CRAFT Country Strategy 2015-2018
In Morocco, the CRAFT program mainly aims to support fiscal transparency and the right of access to information regarding the tax system, and to ensure a budget allocation that promotes social and economic rights for marginalized individuals. Two local associations, Transparency Morocco (TM) and Espace Associatif (EA), will be working on implementing the five CRAFT strategies in Morocco. First, research will be done to diagnose and review the Moroccan tax system, to benchmark it with other similar countries, to come to a common framework for fiscal transparency and to propose alternative policies. Second, in terms of training, a guide will be developed to simplify tax information to help CSOs in their civic education activities. Also, training workshops will
55 http://data.worldbank.org/country/morocco 56 http://www.tradingeconomics.com/morocco/government-debt-to-gdp 57 http://data.worldbank.org/country/morocco 58 http://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS
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be held on principles of taxation and its international, national and regional dimensions, and on the role of civil society. Besides, more training will be organized to strengthen CSOs in their advocacy for public policies on Economic Social and Cultural Rights (ESCR) and principles of tax justice, and providing them with mechanisms and tools to be locally involved in tax justice. Third, concerning civic education, an awareness campaign of the role of civil society and the media will be launched. Moreover, a campaign will be carried out focussing on raising citizens’ awareness about their constitutional rights, together with mobilizing them on their rights to access budget information, budget transparency and fiscal justice. Fourth, in terms of policy advocacy, parliamentarians and local officials are targeted to increase support for citizen participation in tax matters. Advocacy interventions will also be undertaken to promote the right of access to information on tax policies and the integration of fair taxation measures in the coming budget laws. Some advocacy actions will be carried out towards the tax administration to be open to citizens in giving the appropriate information. Fifth, various alliances will be strengthened through cooperation between Oxfam, TM, EA and the CSOs targeted by the program. Finally, one of the main goals of this program is also to produce a tax guide for citizens to set up detailed list and records on how citizens can claim their rights and be better informed about their fiscal situation.
TUNISIA General context
Tunisia is currently undergoing a transition process following the popular uprising that started in December 2010 and that eventually led to the escape of former dictator Ben Ali and to the election of a National Constituent Assembly in October 2011. After a period of crises, the quartet of the national dialogue, which was launched in July 2013, has managed to suggest a roadmap which eventually let to the holding of legislative and presidential elections in October and December 2014.
The new constitution that was passed on January 26, 2014, with a large majority (200 out of 216 votes) reflects the ultimate quest of compromise in the Tunisian context. Despite difficulties encountered throughout the drafting process and civil society being discontent with certain items, the final version of the new Constitution not only provides an important opportunity to further advance women's rights (Article 20 and 46) but also accountability and social justice (Art 10 and 14) in addition to essential services (Art 38, 39 and 44). As part of the decentralization process to reform the ultra-centralist state and regional inequalities, Chapter 7 of the Constitution covers the local power.
The security context being less stable than prior to the regime change has contributed to a shrinking economy and also a decline in tourism revenue. However, Tunisia did see a slight improvement in its Human Development Index value. It now ranks on place 90 out of 187 countries with value of 0.719 in 2012 and 0.721 in 2013. According to the World Bank data59, in 2013, the Tunisian GDP was estimated at around 47 billion USD with an annual growth of around 2.5%. In the same year, the Government debt amounted to 46% of the GDP60 and the unemployment rate reached almost 16%.61 On a total population of almost 11 million, it was estimated in 2010 that 15.5% falls below the national poverty line. Overall, the tax revenue as percentage of GDP amounted to 21% in 2012.62
59 http://data.worldbank.org/country/tunisia 60 http://www.tradingeconomics.com/tunisia/government-debt-to-gdp 61 http://www.tradingeconomics.com/tunisia/unemployment-rate 62 http://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS
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Since the establishment of the Public Finance System in Tunisia in the 1960s, the executive maintained a stranglehold on all actors involved in the budget process, with no citizen participation mechanisms and regulatory measures in terms of accountability and transparency. This reality was an important factor leading to social and economic inequalities that contributed to sparking the Revolution of 14 January 2011. The public finance system in Tunisia has given room to inefficient management of public funds at several levels. It has been a determining factor in the considerable rise in inequalities, such as an inequitable distribution of public expenditure between regions, as well as an injust tax system disfavouring poor and middle classes.
Tax policies and practices Analysis of the tax policies and practices in Tunisia lead to the following main points of concern:
- Despite advances in Tunisia in terms of access to information, the level of fiscal transparency remains unsatisfactory. Key information remains unavailable, such as the revenue structure by categories of taxpayers, the revenue generated by extractives and others
- The heavy tax burden on some categories of taxpayers, especially employees who contribute to over 46% of direct taxes in 2013. Private companies continue to benefit from many tax benefits while their contribution to job creation is very low compared to the generosity of incentives.
- No tax measures guaranteeing positive discrimination in favor of women and marginalized youth in the regions.
- The expansion of the informal economy, which currently accounts for over 40% of GDP, and causes a shortfall in tax revenues
- Even though the democratic transition process evolved a lot since 2011, municipalities still don’t take a central stage in governance. Nevertheless, one of the chapters of the new Constitution of 2014 states that local communities should adopt mechanisms which are likely to ensure a large participation of citizens and civil society in the preparation and monitoring of the execution of its programs. This is an opportunity for municipalities to promote their institutional and budgetary autonomy and increase their revenues which in turn will improve the quality of services provided to citizens.
CRAFT Country Strategy 2015-2018 In the coming years our CRAFT work in Tunisia will focus on accountability of public finances at the community level through an active involvement of citizens, especially youth and women. Oxfam and our local partners (Al Bawsala, Observatoire Tunisien l’économie and Forum Tunisie des droits économique et sociaux) will undertake a power analysis and elaborate and efficient advocacy strategy to influence the legislative framework. We will work on civic education to increase citizens’ awareness of the importance of taxation at the municipal level. In our civic education and mobilization we will especially work with local CSOs. Through the organisation of diverse debates the participation of the various target groups and citizens will be stimulated. By empowering local communities, the quality of social services can be improved, which in turn contributes to a better awareness and involvement of citizens at the local level. Collaboration with municipalities and decision-makers at the local level is facilitated by the political independence and national credibility of the partners. Finally we will also make sure relations with local media are strengthened. The necessary collaboration already exists between the Ministry of the Interior, the Ministry of Economic and Financial Affairs, and the Ministry of Development and International Cooperation, Oxfam and the local partners.
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Oxfam and its partners in Tunisia will focus on advocating for tax reforms that (ongoing) ensures social justice for the poor and middle classes. Our specific focus areas will involve Tax in Extractive Industries, Tax Evasion, Fiscal Fraud and Illicit Financial Flows, the Informal Sector and General Tax System Reform.
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ANNEX 2: OVERVIEW OF KEY COUNTRY ACHIEVEMENTS
Based on working group sessions during the 8th CRAFT Strategy meeting in Dhaka, Bangladesh in March 2015 we have distilled the following overview of key country achievements.
Country Key achievements How achieved Lessons learnt
Senegal Contribution to the creation of the new general tax code that saw an increase in corporate tax and decrease in personal income tax (PIT)
Contribution to the creation of a national office against fraud and corruption
Passage of a new& law on declaration of wealth
Participation in the process of the creation of the law
Production of advocacy materials and engage in lobby with gov-ernment / parliament
Training sessions to parliament Supporting the creation of a par-
liament network on Mining Gov-ernance
Resistance of certain actors (politicians, ministers) is a bar-rier that must be addressed
Lack of technical and financial capacity slows down progress
Civil society’s lack of knowledge about parliamentary processes needed to be addressed in or-der to enhance the effective-ness of advocacy efforts.
Uganda Increased community engagement: - changed mindsets, perceptions and atti-tudes of people with regards to tax - increased engagement of people to hold the authorities to account on tax is-sues - improvements in the ways taxes are collected locally
Advocacy success on Double Taxation Agreements: the government declared they would not negotiate new DTTs with-out first developing a new country strat-egy on DTTs to guide the negotiations
Many people were reached through the use of radio talk shows
Many changes on the local level need to happen first on the na-tional level, so local level experi-ences were taken up to the na-tional level debates and it was made sure that the central gov-ernment is aware and where needed intervenes
Developed a policy document on DTTs with a focus on The Neth-erlands and Mauritius when these treaties were being dicussed. Engaged with the Ministry of Fi-nance based on thorough evi-dence and knowledge.
Use dialogue to engage with the authorities.
Where possible get authorities involved during research phases and get their endorsement of critical research outcomes.
Preference of engagement approach over confrontative ap-proach: seek cooperation based on expertise.
Niger New constitution ensuring transparency Creation of commissions on transparency
and against corruption at re-gional/parliamentary level
Lobby at National Committee Information, education, sensitiza-
tion Production of communicational
and advocacy material (media campaign)
Problems with implementation because of resistance
Absence of political will International pressure reinforces
the action of CSOs Political and judiciary pres-
sures on CSOs ‘leaders Tunisia New investment code spreading incen-
tives withdrawn by finance ministry Anti-tax evasion policies included in new
constitution
Publishing studies and infograph-ics
Audition in Parliament Civic education Media campaning Participatin in the the law drafting Creating spaces of dialogue
between administration, legisla-tor, researchers and civil socituy
Necessity to simplify tax issue (infographics)
Deputies are allies but not ad-ministration
Mali Creation of a network within National Assembly
Better communication between tax ad-ministration and tax payers
Strengthening the capacity of deputies
Lobby, training, sensitization
Ability to provide an added value
Necessity to target permanent staff at governmen-tal/parliamentary level
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Pakistan Creation of tax reform commission to: ‐ Rationalize direct and indirect taxes ‐ Abolish exemptions and concessionary
regimes Senate standing committee on broaden-
ing tax base Business chambers of commerce across
Pakista collectively support rationalising the tax regime.
Through evidence based re-search studies
Key stakeholders lobby meeting Fuelling discussion through me-
dia Providing pressure through social
mobilization and alliance building – tax justice coalition based on 40 civil society organiation to raise voice collectively and lead partners are providing capacity building trainings in research and advocacy in tax affairs.
Programmatic approach devel-oping synergy at country, re-gional and global level essential (Inequality campaign)
CSOs expertise for public advo-cacy (tax, research)
Nigeria Alliance of multiple non state actors (CSO, FBO, Trade associations, Labour unions, media,…) – capacity building, mobilized for action at national and state levels (including women)
Awareness raising Training, sensitization and plat-
form support Lobby, advocacy, media cam-
paign
Local energy and knowledge of communities awaiting mobiliza-tion and organization
Consistency and sustained media and advocacy campaigns bring results
Bangladesh NBR has initiated to digitize the tax col-lection process, ensuring greater tax coverage.
The government declared the importance of having a direct tax based budget for the first time.
Organised advocacy and policy dialogue meetings with the Fi-nance Minister, Members of Par-liament, NBR officials (both at na-tional and local level), econo-mists, academics, (I)NGOs and the media to discuss the out-comes of the research and re-lated policy recommendations.
Creation of strategic relation and interpersonal relationship with key stakeholders.
Awareness raising and training: Trainer of Trainers (ToTs) and grassroots campaigners were trained and the tax campaign, which focused on the link be-tween fair taxation, prosperity and progress, reached over 60 thousand people across the country.
Engaged media through creating sensitization on pro-poor issues and TAX/VAT/DRM.
Limited technical and finance resources slows down progress
Awareness on the pro-poor issue can helps to spread this campaigning.
The Ministries can be convi-enced with proper research and evidence.
The MPs are interested to learn more how to involve in the budget making process.
The Finance Ministry is always strong and influcencing and sometime they do not take into account other ministries and MPS.
Supportive media is important. The issue of participatory public
budget, TAX, DRM, and VAT can be popularized with mass campaigning.
The voices from the grassroots are always strengthening influ-encing.
Ghana Tax rates raised in Special Free Zone Regimes from 8% to15%
Reactivation of Ghana Tax Justice Coali-tion
Inclusive participation of women in tax related issues
Advocacy based on research and policy briefs, formal meetings with GRA and minister of finance
CSO meetings, sensitizing women
Existing law vs. Practice Importance of the poor knowing
their rights when paying taxes – empowerment
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© Oxfam Novib April 2015 This document was written by Ilse Balstra in cooperation with TJN-A For more information, or to comment on the CRAFT Program Framework, please email [email protected] This publication is copyright but the text may be used free of charge for the purposes of advocacy, campaigning, education, and research, provided that the source is acknowledged in full. The copyright holder requests that all such use be registered with them for impact assessment purposes. For copying in any other circumstances, or for re-use in other publications, or for translation or adaptation, permission must be secured and a fee may be charged. E-mail [email protected] Oxfam Novib April 2015. Oxfam Novib P.O. Box 30919 2500 GX The Hague The Netherlands T +31 (0) 70 3421621 [email protected] www.oxfamnovib.nl www.maketaxfair.net
