Director of Ceremonies,
Honourable Ministers of the Swedish Government,
First I would like to thank the Swedish Government for taking the initiative to convene this ‘Conference on Capacity Building concerning Taxation’ as well as convey my appreciation for the invitation this Government extended to me to attend the Conference.
I sincerely hope that the detailed programme we will go through today and tomorrow will indeed help all of us with regard to the important matter of ‘Capacity Building concerning Taxation’.
I am also glad that one of our hosts, Minister Isabella Lövin, Minister for International Development Cooperation, spoke about the ‘2030 Agenda’, the Sustainable development Goals and the related Action Plan which emerged out of the Addis Ababa 2015 International Conference on Financing for Development.
I am certain that all of us are familiar with the Resolution adopted by the UN General Assembly in September 2015 entitled “Transforming our world: the 2030 Agenda for Sustainable Development”.
One of the paragraphs in that Resolution says:
“We will seek to build strong economic foundations for all our countries. Sustained, inclusive and sustainable economic growth is essential for prosperity. This will only be possible if wealth is shared and income inequality is addressed. We will work to build dynamic, sustainable, innovative and people-centred economies, promoting youth employment and women’s economic empowerment, in particular, and decent work for all. We will eradicate forced labour and human trafficking and end child labour in all its forms…
“We will adopt policies which increase productive capacities, productivity and productive employment; financial inclusion; sustainable agriculture, pastoralist and fisheries development; sustainable industrial development; universal access to affordable, reliable, sustainable and modern energy services; sustainable transport systems; and quality and resilient infrastructure.”
By any standard this is a very ambitious and correct agenda whose objectives must be achieved in all countries by 2030. Naturally, it raises the important of question of what resources and ways and means will be generated and used to realise these goals.
In this context the UN General Assembly Resolution I have mentioned says:
“We recognise that each country has primary responsibility for its own economic and social development. The new Agenda deals with the means required for implementation of the (Sustainable Development) Goals and targets. We recognize that these will include the mobilisation of financial resources as well as capacity-building and the transfer of environmentally sound technologies to developing countries on favourable terms, including on concessional and preferential terms, as mutually agreed. Public finance, both domestic and international, will play a vital role in providing essential services and public goods and in catalysing other sources of finance.”
In this regard I would like to draw your attention in particular to this last sentence which says – “Public finance, both domestic and international, will play a vital role in providing essential services and public goods and in catalysing other sources of finance.”
Let us stay with the matter of the resources needed to achieve the 2030 Agenda.
In 2016 UNCTAD, the UN Conference on Trade and Development, distributed a Report which, among others, addressed the matter of domestic resource mobilisation.
Among others this Report made the important point that:
“In order to achieve the ambitious Sustainable Development Goal Agenda, developing countries will need to raise more revenues. While external sources will play their part, most of those revenues will be domestic. To balance increased revenues with equitable development, taxation will need to be progressive and used efficiently and transparently.”
UNCTAD went further to make an observation which relates to the very legitimacy of any Government, saying:
“The ability of a State to mobilize its own sesources and collect taxes to pay for essential services (education, health, social protection, security, and the like) is at the very heart of a properly functioning government. It is also essential for public investment in equitable and sustainable development and the reduction of dependence on aid. It has also been argued that domestic taxation also increases accountability and creates a platform for governments to engage with their citizens thus creating a social or fiscal contract between State and citizens (Organization for Economic Cooperation and Development (OECD), 2014a).”
I have quoted these various paragraphs drawn from UN documents because I was asked to address at this Conference the issue or topic of – “The importance of political leadership for domestic resource mobilisation.”
I believe that the conclusions we should draw from the paragraphs I have extracted from the various UN documents are that:
(i) domestically mobilised resources will play the central role in the developing countries in terms of achieving the Goals of the 2030 Agenda;
(ii) public resources will constitute a strategically important part of these domestic resources;
(iii) as the world works to achieve the Agenda 2030 Goals it will ensure that ‘nobody is left behind’;
(iv) in this context the world will continue to depend on initiatives taken by each sovereign State to address the Agenda 2030 Goals;
(v) success in generating the resources and devising the ways and means to ensure the success of Agenda 2030 will depend on the quality of both the leadership and the institutions which, as legitimate government, will inspire the required successes; and,
(vi) other domestic and international resources will be required to supplement the domestic public resources to achieve the Agenda 2030 Sustainable Development Goals in the developing countries.
We have gathered here in Stockholm to address the very important matter of institutional capacity, policy and programmes to ensure the effective functioning of our tax administrations or authorities.
Obviously this issue of the effective functioning of our tax administration is central to the matter which Minister Isabella Lövin and I are addressing, of achieving the Agenda 2030 Sustainable Development Goals, especially in the developing countries.
This is because it is principally through taxes that Governments, the public sector, accumulates the resources which will be required to play and will play a central role in terms of achieving the excellent Agenda 2030 Goals.
Given this reality, the UNCTAD Report we have mentioned goes so far as to indicate some estimate about what proportion of the GDP should have been collected through taxes to provide the public sector with the means to make a meaningful contribution to the achievement of the original MDGs. It says:
“The report African Economic Outlook (African Development Bank Group (ADBG et al., 2014) notes that in 2012 low-income African countries only mobilised an average 16.8 per cent of their GDP in tax revenues, below the minimum level of 20 per cent considered by the United Nations as necessary to achieve the Millennium Development Goals (United Nations Development Programme (UNDP, 2010)).
“Lower- and middle-income African countries fell just short of the minimum target, with an average share of tax revenues in GDP of almost 20 per cent. Upper- and middle-income countries came closer to the OECD average of 35 per cent, at 34.4 per cent. For Africa as a whole, the tax burden stood at 26 per cent of GDP in 2012.”
In this regard I hope that important organisations present here, such as ATAF, the African Tax Administration Forum, will help us by indicating what average percentage of our respective GDPs in the period up to 2030 should accrue to taxes, to enable the Governments of the developing countries to have enough resources to contribute to the realisation of the Agenda 2030 Goals.
However, important as this is, all of us know that tax administration is not merely and only a technical matter, requiring management and operation by suitably qualified civil servants working in professional tax institutions.
The payment, collection, utilisation and accounting of and for taxes are all supremely important political rather than merely and only technical matters.
Accordingly the political leadership in our countries carries a heavy and historic responsibility to discharge its responsibilities such that:
(vii) it creates the conditions and atmosphere for individual and corporate citizens honestly to pay their taxes;
(viii) this must include creating the conditions for transparency with regard to the use and accountability of and for these taxes;
(ix) the taxation system is not regressive and therefore protects and benefits the poor in a transparent manner, not serving the interests of the rich and powerful in society;
(x) the tax authorities are able to function in an equitable and legal manner with regard to all tax payers, without discrimination and without fear or favour; and,
(xi) it creates the best possible conditions for the sustained mobilisation of all other resources, including the foreign, to supplement the domestic resources for the achievement of the 2030 Sustainable Development Goals.
In the context of the immediate foregoing I must draw the attention of our Conference to the specific matter of Illicit Financial Flows. These outflows constitute a very major source of the loss of the domestic resources our developing countries need to respond to Agenda 2030.
I am certain that all delegates are familiar with the major Report our High Level Panel on Illicit Financial Flows from Africa issued in 2015.
Conference will also know that the Proposals contained in that Report to combat these Illicit Outflows were adopted by the African Heads of State and Government in 2015, and subsequently, and in essence, by the 2015 Addis Ababa International Conference on Financing for Development and the UN General Assembly Summit which adopted Agenda 2030.
Delegates can access this Report on Illicit Financial Flows at the website:
What everything I have said means for us meeting here in Stockholm, especially as professionals in the area of tax administration, is that for us to succeed in our work, we need:
(xii) honest Governments which act consistently in a manner that convinces both the domestic and international communities that these are Governments truly committed to serve the people;
(xiii) Governments and therefore political leaders which and who act consistently in a manner which demonstrates that they are free of and are truly opposed to corruption in all its forms;
(xiv) Governments and political leaders who will take all necessary action to help put in place all such legislation and institutions as would be required to ensure effective domestic resource mobilisation, including through our tax systems;
(xv) Governments and political leaders which and who would ensure the effective sustainability of such tax and other institutions;
(xvi) effective legislative oversight relating to these processes; and,
(xvii) effective transparency and therefore regular public accountability about all matters to do with the process to achieve the Agenda 2030 Goals.
In the end we must strongly assert the principle and practice that for us to achieve our goals as peoples in the developing countries, we need the effective cooperation between both our executive authorities on one hand, and our constitutionally mandated administrative organs and civil society organisations on the other.
With regard to everything I have said, I note that in our Concluding Session tomorrow, we intend to receive “Conclusions and presentations from the Working Groups at the Conference on Capacity Building concerning Taxation”.
This is as things should be.
However, in addition, I seriously suggest that we must consider the role that the political leadership must play in our countries to create and sustain the best conditions for our tax administrations to succeed in their tasks.
Related to this, I suggest that any Statement or Report we might issue must include the observations that:
- we, tax professionals, commit ourselves to discharge our responsibilities honestly, without fear or favour;
- we urge our Governments, and the rest of the international community, to do everything possible and necessary to strengthen our tax administrations;
- we urge that our Governments prescribe tax policies which favour the poor, are transparent, and enjoy the support of the population as a whole;
- we encourage our Governments to understand that one of their principal tasks, which they must perform, is to encourage all private and corporate citizens willingly to respect their tax obligations;
- we urge our Governments to create the right atmosphere for domestic resource mobilisation, especially through taxation, by respecting the dictates of effectiveness, transparency and accountability with regard to the use of public resources, accompanied by credible and sustained campaigns against corruption in all its forms; and,
- our Governments and political leaders must discharge their responsibility with regard to helping to encourage the understanding among the population that all citizens have a responsibility to work together to ensure the success of the common objective – prosperity for all in free countries!
Thus it must be that in all considerations which relate to the realisation of the Agenda 2030 objectives, necessarily we must discuss the matter of the important role of our respective leadership collectives.
In the end we cannot avoid the conclusion that the daily conduct of our political leadership, in all spheres of government, will determine whether the Agenda 2030 Agenda in our countries fails or succeeds!
What will decide the issue in this regard is what our political leadership does in the larger and strategic context of domestic resource mobilisation throughout the developing world.
What I am suggesting is that what this important Conference must do, precisely because of its importance in terms of the composition of its participants and its venue, is to issue a clarion call to the political leadership of the developing countries specifically focussed on the matter of the achievement of the Agenda 2030 Goals.
That message must be that our political leadership in the countries of both the South and the North must take full ownership of Agenda 2030 and therefore help to create the maximum space for the success of this Agenda for the benefit especially of the billions of the peoples of the South!
Thank you for your attention!