A book designed as a practical manual for the taxation of cross-border transactions, with illustrated scenarios of how the principles of international taxation apply in real-life situations, has been launched in Accra.
The riveting 700-pager titled Modern Approach to International Taxation is subdivided into six parts – each dealing with concepts and tools for international taxation, with specific references to selected countries in Africa and Europe.
Exquisitely branded, it is also structured as a textbook for students of international taxation, professional bodies, universities and other tertiary institutions.
It explores in detail key aspects of the subject – including introduction to international taxation; international tax planning; international tax avoidance and anti-avoidance strategies; transfer pricing; planning international value-added tax and Customs procedures; and tax development in Africa.
The book references the Organisation for Economic Cooperation and Development (OECD) Model Tax Convention on Income and Capital and the United Nations (UN) Model Tax Convention on income and Capital; and cited specific jurisdictional and domestic sources of tax laws in Ghana, Nigeria, South Africa, Tanzania, the United Kingdom and United States of America to demonstrate the real-life application of international tax principles in their respective domains.
Its author, Fred Kwashie Awuttey – a Management and Tax Consultant at EM Tax Advisors Ltd. – speaking at the launch explained the inspiration behind it.
“When I was studying international taxation at the Chartered Institute of Taxation in the United Kingdom (UK) in 2016, I noticed that literature on the subject is scanty and the existing materials are just research works purposely written for supranational organisations. For this reason, I decided to put together a material based on the African context of international taxation and make it available for the public to read for their enlightenment,” he said.
According to him, the book also sheds light on international issues on Value Added Tax (VAT), Customs and the African Continental Free Trade Area (AfCFTA). “Many people do not know that we have an international aspect of VAT, so this book looks at that aspect as well,” he added.
Francis Timore Boi, a Tax Consultant and Fellow of the Institute of Chartered Accountants Ghana (ICAG), in an interview with Business and Financial Times (BFT) after the event emphasised the critical need for a legal framework that empowers the Ghana Revenue Authority to rope online businesses into the tax net – encouraging African governments to initiate steps for signing tax treaties that boost their international trade.
“I noticed that in Africa we do not like signing tax treaties among ourselves. One of the major reasons for signing tax treaties is to prevent tax avoidance and evasion – a reason for which the United Kingdom has signed one with Ghana since 1994.
“Only a few African countries like South Africa, Mauritius and Morocco have entered into tax agreements. Many of them – including Ivory Coast, Burkina Faso and Togo – do not have tax treaties; and this is one reason why many businesses suffer withholding tax,” he added.
With AfCFTA in full swing, opening a new era of possibilities for African trade, he underscored the need for its members to have tax treaties to deal with tax issues among themselves.
“The AfCFTA’s multilateral agreement is not just about the movement of goods, services are also important; hence the need to sign multilateral agreements among ourselves. Not signing tax treaties is a disincentive for trade among African countries. I do not understand why we do not like doing so despite it being beneficial,” he further said.
While expressing worry about the failure of people with income overseas to pay their taxes, he noted that it is high time sister-countries signed multilateral agreements which enable them to exchange information and expose the non-compliants.
“If you look at the European countries, almost every country has a treaty with their sister country; and it looks like they rather push us to come and sign the treaty with them when we should be the ones initiating steps to go into such agreements. This may be due to the fact African countries do not fully appreciate the importance and benefits of signing tax treaties,” he elaborated.
