The fight against tax evasion requires the use of new technologies

Every day, non-governmental organizations, police and journalists uncover new cases of tax evasion, showing that what was considered the exception has actually become the rule. However, this phenomenon is not new, since the simplification of tax evasion already existed under the Gracchi tribunate in Rome in the 3rd century BC. The phenomenon of false land declarations was established by wealthy Roman landowners, including senators.

In Africa, the fight against tax evasion should be one of the main goals of public policy. It is no secret that if national governments succeeded in eradicating tax evasion, they would be able to heal all the economic and social flaws in their states.

Taxation is the key to economic or social justice

The taxes and contributions of the richest make it possible to pay social assistance to the most popular classes. This redistribution stabilizes the community, creates empathy among its members, and creates a sense of belonging that is essential for its growth. Taxation is the most important factor determining not only regional but also national sovereignty. The independence of a region or country is built primarily on their ability to free themselves from the help of others. The attributes of sovereignty mean little in the face of economic and financial dependence. As the saying goes, “The hand that gives is always higher than the one that receives”.

The economic independence of developing countries is related to their ability to generate domestic resources that allow them to satisfy their basic needs, which is impossible without appropriate taxation. This is true both for a country and for a continent like Africa. This results in significant instability and the need for external resources to fund our priorities.

Finally, taxation is the key to international justice. Many multinational firms or, to use the epithet of Maurice Baiat, large inter-territorial units realize their intention by exploiting the apathy of state structures through bribes to evade tax liability without any obligation to the state.

Commitment to learning and cooperation between subjects

Combating tax evasion is a painstaking task that requires political will and advanced management in synergy between various government agencies. Once this goal is achieved, action must be initiated to identify and punish all tax fraud. In the fight against tax evasion, it seems more than necessary for African leaders to invest in the training of tax officials.

The weight of the informal economy, often forgotten by some, but not to be overlooked

Economists Nancy Benjamin and Ahmadu A. Mbaye estimate that informal sector enterprises employ more than 90% of the population and contribute more than 50% to French-speaking West Africa’s GDP. Large West African businesses in the formal sector account for 95% of tax revenues, while the informal sector, although providing almost 50% of GDP, contributes only 3% of income tax. Faced with this problem, the solution for the tax administration might be to go to customs controls for more information on imported products. However, perfect cooperation with the customs administration is needed and it would be unreasonable to deny that in some sectors, such as the service industry, the actions of the customs can not bring much benefit.

Using new technologies to combat tax evasion

Therefore, to eradicate tax evasion, the use of new technologies seems to be the most promising solution. The first step will be to use the blockchain. The principle would then be to create a digital ledger that lists all financial transactions on the continent. Then the second step would be to use machine learning and identify all undeclared assets. This proposal obviously requires the efforts of all administrations and the adaptation of the regulatory framework to this new practice.

CEO of HADAR & BRIOT AssociƩs, he