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Fighting BEPS in Africa: a review of Country-By-Country Reporting

Mon, 06/19/2017 - 05:24

Following the Panama Papers leak and numerous press reports of aggressive tax planning by Multinational enterprises (MNEs) around the world, there has been a concerted effort, notably in developed countries, to combat MNE tax avoidance and increase international cooperation in tax matters. As MNEs operate across borders they can use multi-jurisdictional tax planning, in combination with transfer pricing, to limit their tax obligations. Unfortunately, some MNEs aggressively plan an operation around these tax structures to avoid paying their fair share of tax. This is mostly legal, as MNEs generally do not breach any single tax jurisdiction’s laws. However, such practices have a negative impact on the countries in which they are operating, regardless of whether they are legal or not.

A key responsive measure to address aggressive MNE tax planning has been the OECD/G20 Base Erosion and Profit Shifting (BEPS) Package. Its aim is to close loopholes between various national tax authorities that allow MNEs to unjustifiably shift profits across borders. Within this, a key component, and part of the minimum BEPS action requirements, is Action 13: Transfer Pricing Documentation and Country by Country Reporting (CbCR).

Policy recommendations made by this brief:

  • by the time of the 2020 review MNEs will be more aware of this process, and it is possible that the idea of lowering the EUR 750 million revenue threshold will find a more receptive audience
  • given the trust barriers to lowering exchange of information requirements it is not clear that this issue can be resolved in favour of those African states currently not able to comply. Consequently, African countries need to upgrade their institutional capacities and legal frameworks. Official development assistance could be targeted at this area
  • as Action 13 reports are submitted over the next two years a much more informed assessment of the strengths and limitations of CbCR should emerge. This should enable the refinement, and possibly the extension, of the system
  • the application of CbCR to include other taxes paid by MNEs, beyond corporate income tax, could also be considered
  • the transparency of CbC reports will, no doubt, feature in the 2020 review and African revenue authorities will need to engage with the issue, as it could bridge a lot of their constraints

 

Africa’s youth employment challenge: new perspectives | IDS Bulletin Vol 48, No 3

Fri, 06/16/2017 - 05:12

Youth and employment concepts are not new to development discourse in sub-Saharan Africa but over the last decade interest has increased dramatically, becoming a much more important focus for policy, intervention and research throughout the continent (and globally).

This IDS Bulletin reflects challenges in Africa and demonstrates how political context shapes youth-related policy.The articles in the Bulletin consider the evidence on youth employment policy and interventions, the politics of youth policy, the changing nature of young people’s work, and the promotion of entrepreneurship. They are authored by the ten members of the first cohort of the Matasa Fellows Network (a joint initiative by the MasterCard Foundation and IDS), which has a particular focus on the youth employment challenge in Africa.

Articles:

  • Introduction: New Perspectives on Africa’s Youth Employment Challenge: Seife Ayele, Samir Khan and James Sumberg
  • Youth Employment in Developing Economies: Evidence on Policies and Interventions: Nicholas Kilimani
  • The Politics of Youth Employment and Policy Processes in Ethiopia: Eyob Balcha Gebremariam
  • The Side-Hustle: Diversified Livelihoods of Kenyan Educated Young Farmers: Grace Muthoni Mwaura
  • Gambling, Dancing, Sex Work: Notions of Youth Employment in Uganda: Victoria Flavia Namuggala
  • Navigating Precarious Employment: Social Networks Among Migrant Youth in Ghana: Thomas Yeboah
  • Youth Participation in Smallholder Livestock Production and Marketing: Edna Mutua, Salome Bukachi, Bernard Bett, Benson Estambale and Isaac Nyamongo
  • Non-Farm Enterprises and the Rural Youth Employment Challenge in Ghana: Monica Lambon-Quayefio
  • Does Kenya’s Youth Enterprise Development Fund Serve Young People?: Maurice Sikenyi
  • Promoting Youth Entrepreneurship: The Role of Mentoring: Ayodele Ibrahim Shittu
  • Programme-Induced Entrepreneurship and Young People’s Aspirations: Jacqueline Halima Mgumia