The Ghana Revenue Authority (GRA) is optimistic that the long-term benefits of the African Continental Free Trade Area (AfCFTA) regarding revenue mobilisation for member-countries will mitigate the expected tariff losses in the short term, Commissioner-General of the GRA, Dr. Ammishaddai Owusu-Amoah, has indicated.
Dr. Owusu-Amoah, who was speaking at the closing ceremony of the 7th Congress of the African Tax Administration Forum and the African Tax Research Network in Accra, explained that the long-term benefits of the AfCFTA, including lowering trade costs, promoting regional value chains, and providing consumers with greater variety, may balance out the short-term losses.
A recent study by the United Nations Conference on Trade and Development (UNCTAD) has estimated that Africa may lose about US$4.1billion in tariff revenues in the short term due to AfCFTA’s implementation.
But the Commissioner-General suggested that the short-term losses could be minimised through various measures including, a rationalisation of tax incentive regimes, improving efficiencies within tax administration through the use of technology, intensifying the fight against illicit financial flows, and broadening the tax base as Ghana is currently pursuing.
“It is important for tax and Custom authorities in the AfCFTA to implement all the strategies that have been discussed in this congress in order to enable our governments minimise revenue losses in the short term, while we prepare for the long-term benefits of the trade bloc,” Dr. Owusu-Amoah advised.
As the purpose of the congress was to deliberate on the tax and revenue implications of the AfCFTA, participants discussed short, medium and long-term implications of the trade bloc, and steps member-states may take to adjust policies to counter effects of estimated short-term revenue losses and the broader tax policies issues.
Participants agreed that the opportunities for trade and investment require capacity-building at both the technical and infrastructural level.
Executive Secretary of ATAF, Logan Wort, stressed the importance of countries to maximise gains from the AfCFTA, and welcomed the opportunity presented by the ATRN to deliberate further on how a possible drop in revenue due to tariff liberalisation can be mitigated.
He said an increase in intra-Africa trade must not only increase countries’ tax bases, but improve economic development as well.
The conference called for the need for greater cooperation at the regional level for the successful implementation of trade facilitation measures.