Ending poverty through effective tax governance


17 November 2015

The Millennium Development Goals (MDGs) have reached their deadline this year and the Sustainable Development Goals (SDGs) have now kicked in. Ending poverty is Nº1 among the 17 goals set by the United Nations in order to “end poverty, protect the planet and ensure prosperity for all”.


Considerable progress was made in the context of the MDGs. The target of reducing extreme poverty rates by half was met five years ahead of the 2015 deadline and more than 1 billion people have been lifted out of extreme poverty since 1990 (Source: http://www.un.org/millenniumgoals/poverty.shtml). However, a report recently published by the international development organization Development Initiatives indicates that the number of people living in extreme poverty has increased in 30 countries. The 18 countries to have experienced the fastest increase in poverty are all in Sub-Saharan Africa. Needless to say, these countries must take drastic measures if they are to successfully end poverty by 2030, as required by the SDGs.


The report looks into both the international and domestic resources available to countries to help them end poverty, but highlights the importance of foreign aid in achieving this goal. However, when it comes to financing development, the consensus is that emerging and developing countries should be encouraged to leverage their own resources as opposed to rely on foreign aid, since the efficiency of the latter has been found to be debatable.


Avatar Technologies (Avatar), a parent company of Global Voice Group, rises to the challenge. It proposes to empower emerging and developing countries to harness their tax system to increase their revenue. Avatar offers the governments of these countries a comprehensive and real-time tax collection system that registers every single sale electronically via its Electronic Fiscal Devices (EFDs). The system therefore makes it impossible to suppress the records or to evade taxes and contributes to widening the countries’ tax base.


The resulting increase in tax revenue allows these countries to finance their on development, reducing their dependence on foreign aid. Avatar’s EFD solution thus provides the tools to secure and control the collection of micro-taxes associated with innovative financing mechanism. This approach to development funding is in line with that of the IMF and of the World Bank, both institutions advocating the revamping of the poor countries’ tax system, as well as the promotion of these countries’ financial autonomy.


Read the whole article: http://allafrica.com/stories/201509241323.html