The African Tax Justice Network hosted a civil society engagement for Africans. Coming from different movements, countries and organisations, it became clear that the intention was to move beyond the divides and focus on the common agenda.  I appreciated how tax justice advocacy can unfold differently at a regional level, compared to the global level. This moment was pivotal for civil society, as a decade before – it would have been impossible to imagine a UN Tax instrument. Similarly, how the composition and dynamics of high net worth individual (HNWI)s in any two countries in Africa can never be the same. Whether in how they got rich, the kinds of politicians that could be involved and even religious or ethnic backgrounds that determine social networks in and outside the country of residence.

Africa hosting the UNFCITC negotiations is historic. A mark of progress from the Addis Ababa Action Agenda after a more lacklustre International Conference on Financing for Development a decade later. I appreciated how extractive industries are often left outside of multilateral dialogues. Especially in tax negotiations. In contrast, fair allocation of taxing rights emerged as the first advocacy position that has inroads. Another position is on advanced pricing agreements. Interesting terminology I wish I could remember from my Chartered Institute of Management Accounting studying days. Not because of the theoretical framework, but for what we are not taught. The manoeuvring of much-needed resources through legal means, denying many countries enough fiscal space for service delivery.

I also learned that when countries aren’t experienced in transfer pricing, especially without enough data. Governments can give concessions to their own disadvantage. Arms length transactions can be vague, making it easy for corporates to manipulate or create loopholes. The imbalance of taxing rights further tips the scale against countries in the global majority. Especially where multiple jurisdictions make it easy for a multinational to optimise their tax liabilities. For example, many companies in Botswana have registered entities under Mauritius’ Global Business Licence, making the most of the country’s tax regime as it would cost less than in Botswana.

Many wealthy individuals can manoeuvre tax regimes in the same manner. Leveraging residency for more favourable terms compared to their citizenship. Reminding me of Botswana’s plan to sell our country’s citizenship to foreign nationals. These examples show how tax inequity and injustice can be enabled and perpetuated. Systems that include lawyers, accountants and tax agents to help navigate loopholes and deny state critical revenue. All whilst the working class and those living in poverty have no options to avoid or pay less tax. Administrative, fuel and road levies, value added tax are all forms of tax that ordinary citizens and migrants alike must pay – regardless of whether they have formal employment or not.

As we continued to caucus, I appreciated other country challenges with double tax agreements. Consistently reminded of how my school curricula never included the hidden crimes of tax avoidance. This had me rethinking our professional association’s code of conduct, need for due diligence and how glaringly missing equity and justice are. Unitary taxing was a new lesson for me. Hearing how African countries member states did not want to change their position on it. This can partly be attributed to limited data on unitary taxation and formulary apportionment. It presents a challenge experienced in Europe, but seemingly successful in the USA. It presents a clear opportunity for all cooperating partners to share, including tax havens. 

As we delved into the substantive elements of the draft convention, sentiments made it clear that member states were keen on a commitment to form rather than substance. Civil society agreed that it was flawed because there was no focus on the obligations and impact on people’s lives. A brilliant example was presented on Bangladesh: where women early paltry sums that can be as small as $1 per month. Similarly in Lesotho, estimated to earn $500 a year. These figures shocked the room as they revealed how a global economy undervalues women’s labour. Sustaining industries but not sustaining lives. I could situate this reality with my own activism, where many grassroots activists have to navigate these spaces knowing full well how deeply unequal resourcing is.

by Dumi Gatsha

A blog series from a grassroots perspective, Dumi Gatsha unpacks and reflects the many nuances, trends and intersectionality of leaving no one behind in Tax Justice. Advocating for the inclusion of communities that live in the margins of political will, multilateralism and formal economic participation amidst challenging socioeconomic contexts.  Akina Mama wa Afrika provided support for Dumi to attend the 3rd Intergovernmental Negotiating Committee on the UN Framework Convention on International Tax Cooperation (UNFCITC)