Global Voice Group's Technology Partner Avatar Technologies Promotes Tax Compliance and an Enabling Environment for Tax Collection

    CAPE TOWN, SOUTH AFRICA, December 09, 2015 /24-7PressRelease/ -- Despite improvements in domestic revenue mobilisation (DRM) in most African countries, over the last decade from 2006 to 2015, tax collection remains low. The effective mobilisation of domestic resources faces significant challenges in almost all areas critical to ensuring effective and sustainable domestic resource mobilisation. There is:

- a very low tax base
- tax erosion due to high levels of capital flight and the inability to deal with illicit financial flows
- weak capacity within the tax administration
- a high proportion of fiscal exemptions extended to investors

A key element for successful tax collection starts with an effective and forward-looking, committed and accountable leadership that sets the right tone at the top. In Africa alone, an estimated US$ 50 billion is lost each year due to fraud and tax avoidance. Taxes due to the governments represent 10 times the total aid budget. Governments must be at the forefront of initiatives to develop the requisite capacities in their countries. In the short term, capacity-building initiatives should focus on the ways and means to broaden the tax base by, for example:

- removing unnecessary tax preferences
- dealing with transfer pricing abuse
- taxing the extractive industries fairly and transparently
- taxing high net worth individuals (HNWIs)
- targeting the informal sector and other largely untapped sectors like urban property
- modernising all tax collection systems to ensure efficiency and effectiveness

African countries should recognise DRM as an effective strategy to finance development. There is a need to mobilise internal resources to implement the Sustainable Development Goals (SDGs) and Agenda 2063, although this does not mean that Africa should not mobilise external resources as well. However, they should not depend on donor aid alone, as most donor countries have failed to live up to the long-standing commitment to deliver 0.7% of gross national income.

Overall, progress remains too slow and too uneven. Too many Africans remain caught in downward spirals of poverty, insecurity and marginalisation. Too much of Africa's enormous resource wealth remains in the hands of narrow elites and increasingly, foreign investors, without being turned into tangible benefits for the people. The enabling environment for tax dodging impacts on national tax systems across Africa. There are also extensive shortcomings in the area of tax equity.

The World Bank's three pillars of tax reform are "simpler and cheaper", "fair" and "transparent". Electronic tools have proved to be the best way to achieve better control of taxation in this way, provided they have been specifically adapted to the country's actual environment. Tax fraud is greatly facilitated by the lack of control over sales transactions and by the negligence of consumers, who fail to ask for their receipts. It is clear that developing countries need a solution that would allow them to leverage their domestic tax resources in order to reduce their dependence on foreign aid and to finance their developmental priorities.

Global Voice Group's technological partner, Avatar Technologies, offers the only Electronic Fiscal Solution that has been designed to address tax compliance issues successfully in both developed and developing countries. This cloud-based and highly secure solution works in real time to create an environment that promotes tax compliance and benefits both taxpayers and governments. Although tax compliance is a worldwide issue, it is particularly problematic in developing and emerging countries where the difference between the VAT (sales tax) due to the State and that actually collected is 50%-60%, compared with 7%-13% in developed countries. This is a significant difference and means that governments are missing out on a huge amount of revenue and are severely hampered in their efforts to put in place progressive tax systems.

Avatar Technologies provides governments and revenue authorities with a sales and fiscal information platform where:

- sales and tax data are gathered at the source of the transaction and transmitted securely to government revenue databases in real time
- merchant identities are authenticated prior to the transaction and each transaction receipt is verified through highly secure and sophisticated digital signatures
- fiscal information is analysed automatically for accurate and valuable decision-making by the revenue authorities

Avatar Technologies's EFD solution is simple and affordable. For businesses, tax compliance may be as simple as adopting Avatar Technologies's 5th-generation sales-recording devices, which are affordable, user-friendly and come with free access to a useful online accounting application. Already-existing devices and smartphones can be seamlessly integrated into the solution. Furthermore, the sales-recording devices have a high level of autonomy, are robust and allow for both remote audit and activation, which means they can be used in businesses located in remote areas. Through its integrated Fiscal Lottery system, Avatar Technologies's solution rewards consumers who make a point of requesting their tax receipt after making a purchase. It is crucial to involve the customers as they have the power to motivate traders to comply--simply by claiming their purchase receipt.

In light of the above, it is simple to see that Avatar Technologies's EFD solution can effectively support the tax system of emerging and developing countries. The solution is simple and affordable, and promotes fairness and transparency, thus supporting the World Bank's three pillars of reform. More than a tax management system, the solution provides the government of these countries with an innovative financing mechanism enabling it to secure funds for development while compensating for dwindling foreign aid.

Visit the website: http://www.avatar-technologies.com

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