Tax administrators from all over Africa converged at the Gaborone International Conference Center where The Botswana Unified Revenue Services (BURS) hosted a 3-day workshop to run until Wednesday.
The workshop aims to train participants on taxation of natural resources, this being the second technical event for the African Tax Administration Forum (ATAF).
The Forum was established after a decision at the “International Conference on Taxation, State Building and Capacity Development in Africa”, held in Pretoria in August 2008.
The workshop is centering “Taxation of Natural Resources-Minerals, Oil and Gas.”
ATAF aims at promoting efficient and effective tax administration to foster economic growth and improved service delivery, and was established out of the discussions on the challenges facing tax authorities in Africa, after a major concern emerged for the need to maximize domestic savings reserves in order to sustain national development priorities and reduce dependence on foreign aid.
Botswana was one of the seven countries in the steering group which led the establishment of the ATAF. Other countries are Ghana, Nigeria, Rwanda, South Africa and Uganda.
The Steering group has to date drafted an agreement and a guiding framework and a communications marketing strategy for the ATAF whose official launch will be on 19 and 20 November 2009 in Uganda.
Speaking at the opening of the workshop, the Commissioner of BURS, Segolo Lekau, said the event was historic as it was a first for Botswana to host an ATAF meeting.
He said that since the ‘birth’ of the ATAF in 2008, there has been remarkable progress as the ATAF Steering Group and Technical task teams have met a number of times “in pursuit of the ATAF business. Their efforts resulted in the holding of two ATAF technical events, with the first one being held in Uganda on “Transfer Pricing” in July 2009 and the second one being this one in Botswana.”
Segolo said the central issue for the conference was to promote and facilitate mutual cooperation among African tax administrators, through sharing experience and expertise in the taxation of natural resources.
The workshop basis was on raising a comparative understanding of the issues and options available to African counties for the taxation of natural resources and the implementation of good policies and administrative practices in mineral resource taxation by African countries so they achieve their specific economic, political and social objectives.
“From time immemorial, the exploitation of natural resources has provided a source of livelihood for many African states,” he said. “Revenues from natural resources continue enabling them to develop infrastructure such as schools, roads, health facilities and provide telecommunication services and social services such as old age pension and destitution programmes.”
The Commissioner also added that natural resources revenues contribute a significant proportion to the Gross Domestic Products (GDPs) of many African economies, but pointed out that there, however, are areas in Africa where exploitation of natural resources has brought more harm than good to the lives of many citizens.
“Reports indicate that in some areas in Africa, revenues accruing from the exploitation of natural resources contribute to corruption and social unrest,” he conceded.
Segolo also noted that Botswana is one of the countries which have successfully utilized its minerals to fund the country’s development agenda, and urged participants to ‘join hands’ and investigate ways and means that should be adopted to maximize and benefit from natural resources.
Segolo said that governments need to develop a Legal Framework for Natural Resources Management which he said is an important vehicle in governing and guiding the divergent interest of key stakeholders such as government, investors and mining companies.
Tax payments accruing from natural resource rents, he said, need to be made public and that negotiations of mining contracts should not be shrouded in secrecy but rather be guided by the legal framework that reflects the interest of the whole nation.