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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

 

 

Why isn’t tech for accountability working in Africa?

Thu, 05/18/2017 - 03:22
Expanding mobile networks and falling costs could transform communication between African citizens and governments. So far, however, attempts to harness new technologies to improve transparency and accountability in Africa and elsewhere have had disappointing results. What is going wrong? Research suggests that an important reason for this failure is a poor understanding of technologies and limited skills in developing and using them. It seems that civil society organisations (CSOs) and governments often ‘re-invent the flat tyre’: experimenting with new tools without finding out what has been tried (often unsuccessfully) before. They also do not follow best practices in how to source, develop and test technologies to ensure these are ‘fit for purpose’. Decision makers should focus on building an effective innovation ecosystem with better links between technologists and accountability actors in both government and civil society to enable learning from successes – and mistakes. Recommendations:
  • those with responsibilities in creating the innovation ecosystem, including funders, should focus on building a supportive innovation ecosystem
  • funders should shift their focus from supporting short-term pilots to building institutions capable of success over time, and invest in strengthening links between initiatives and disseminating learning resources across the continent
  • those who are leading and managing innovation initiatives – in government and CSOs – should focus on getting better and smarter at managing the innovation cycle
  • research suggests the following ‘rules of thumb’ will lead to better outcomes: acknowledge what you do not know, think twice before building a new tool, get a second opinion, test technologies in the field, plan for failure, budget to iterate, and share what you learn

Community-level perceptions of drivers of change in nutrition: evidence from South Asia and sub-Saharan Africa

Tue, 05/16/2017 - 04:37

Changes in the immediate, underlying and basic determinants of nutritional status at the community- and household-level are a logical and empirical prerequisite to reducing high levels of undernutrition in high burden countries.

This paper considers these factors directly from the perspective of community members and frontline workers interviewed in six countries in South Asia and sub-Saharan Africa. In each country, in-depth interviews were conducted with mothers, other community members and health workers to understand changes in health and nutrition practices, nutrition-specific interventions, underlying drivers and nutrition-sensitive interventions, and life conditions.

Overall, the need for basic improvements in livelihood opportunities and infrastructure are solidly underscored. Nutrition-specific and -sensitive changes represented in most cases by deliberate government or NGO supported community interventions are rolling out at a mixed and uneven pace, but are having some significant impacts where solidly implemented. The synthesis presented here provides an invaluable source of information for understanding how community-level change occurred against a wider backdrop of national level progress.

Highlights:

  • the community is a critical nexus for the interventions and wider socio-economic changes that drive nutritional change

  • there is a paucity of community level studies of such broad drivers of nutritional change
  • this six country community level synthesis supports wider data (this issue) on changes in underlying and basic determinants.

  • the performance of “nutrition-specific” community interventions is mixed and uneven