the responsibility to build a nation rests upon its policy-makers, lawyers and accountants. It is a collective one. The next step is to bring all stakeholders to the round-table and contribute to the global tax system from a protectionist standpoint. The lure of subscribing to the global fiscal commons must be tempered with the need to protect the tax bases and revenue of the fiscal sovereign. The time to act is now and right.
Value Added Tax
African countries should consider alternatives to the arm’s length principle. A viable alternative to the arm’s length principle: the unitary taxation (formulary apportionment) approach should be considered. This approach looks in detail at the economic activities resulting into the profits of MNCs for tax purposes. Under this approach, tax authorities in Africa will justifiably impose corporate income taxes on “actual” profits of MNCs accruing form economic activities carried out in their jurisdictions, thereby eliminating the opportunities for base erosion and profit shifting in Africa.