Avatar Technologies wishes you a Happy New Year!

31 December 2015

As 2015 draws to a close, we wish our clients, partners and followers a happy and restful festive season, as well as a prosperous and successful New Year.

Financing basic education through taxation

17 December 2015

Avatar Technologies can help fill the education funding gap by optimizing tax collection in developing countries.

“Education is the most powerful weapon which you can use to change the world”. These words by Nelson Mandela echo far and wide and explain why education ranks so high among the developing world’s priorities. Education is indeed the second of the UN’s eight Millennium Development Goals and is in fourth position on the list of Sustainable Development Goals.

Despite the obvious necessity to make quality basic education accessible to all, the lack of sufficient funds remains an issue. The gap in the annual external financing for basic education in low-revenue countries has increased from US$16 billion to US$26 billion over the past three years.

A UNESCO guidance document entitled Making Education for All Affordable by 2015 and Beyond highlights that this increase in the financing gap is mostly due to the stagnation of the aid allocated to basic education in low-revenue countries. The national expenditure dedicated to education, on the other hand, has increased by US$3 billion in these countries over the past few years. Still, it only represents half of the amount required to achieve the objective of providing basic education to all.

The guidance document suggests that, in order to make up for the stagnating foreign aid, developing countries should find new ways to generate additional revenue to finance their development. It highlights the fact that an improvement of the tax system of these countries could reduce the funding gap by US$7.4 billion.

Electronic tools have proved to be the best way to achieve better control of taxation, provided they have been specifically adapted to the country’s actual environment. Avatar Technologies, a parent company of Global Voice Group, helps emerging and developing countries improve and leverage their tax system through such electronic solutions. Avatar Technologies offers an Electronic Fiscal Declaration (EFD) solution that optimizes tax collection and compliance in the retail sector.

The EFD solution is however more than a mere tax management system. It provides the cutting-edge technological basis for an innovative financing mechanism that aims to boost development through the generation of additional tax revenue. The governments are then free to spend this revenue on development programs – such as making quality basic education accessible to all – while lessening the need for foreign aid.

Read the whole article

The world could lose up to R27 trillion in counterfeiting and piracy

10 November 2015

“Criminal activities such as corruption and tax evasion make up 8% of world trade, according to UN Office on Drugs and Crime.” (Source: World Economic Forum).

Widespread corruption and the financial losses due to tax evasion have led governments to consider the benefits of putting more stringent tax collection methods into place. No longer will governments be able to be complacent with that percentage. Now that new Sustainable Development Goals (SDGs) have been decided upon, it is important that governments do everything they can to collect as much revenue as possible, if they want to achieve these Goals by 2030. 

“Another WEF report estimates the value of the ’shadow economy’ at R8.877trn, a figure that rises to R27.31trn when money laundering is included.”

It is the responsibility of the governments to ensure that they are collecting the correct amounts in tax revenue. As this proves to be a challenge, they need to rethink their tax collection methods to ensure that better systems and processes are in place. Companies such as Avatar Technologies can assist governments in optimizing tax collection to improve their tax revenue.

The illicit economy is formed from the proceeds of illicit trade which is, in turn, largely rooted in organised crime, explained the WEF’s Jean-Luc Vez: “Whether it is human trafficking, arms trafficking, the illegal wildlife trade, counterfeiting or money laundering, these activities are incredibly lucrative and fuel the magnitude of the illicit economy.”

View the original article. 

Africa’s potential for tax revenue from untapped sources

2 November 2015

Africa has the potential to raise tax revenue from many untapped sources on the continent. Countries can increase “their focus on larger tax payers, strengthen tax audits, simplify tax systems and modernize collections.”

There are many countries in Africa that do not collect all tax owed to them. These countries collect a small proportion of GDP in tax revenue. These countries could implement solutions to help standardize tax collection, and solutions to decrease tax fraud and evasion. “We estimate that such measures could increase tax revenues by 10 percent in as little as 12 months.”

Countries with more established tax systems could improve tax collection by prioritizing the largest taxpayers, upgrading their IT infrastructure, making use of digital tax collection methodologies and introduce compliance programs. “These measures could increase tax revenues by 5 percent in 12 months.”

Countries with advanced tax collection systems in place could increase tax revenue by improving compliance with “advanced risk analytical engines. Such steps could increase tax revenues by 2-5 percent in 12 months”.

If countries did the above to improve tax collection and compliance, “Africa’s governments could quite feasibly collect up to $50 billion in additional revenues within the next five years”.

View the original article here.

Tanzania: Demand receipts, TRA tells consumers

21st April 2013

The Tanzania Revenue Authority (TRA) has said buyers of consumer goods should develop a culture of demanding fiscal receipts for every purchase made from their sellers. TRA director of educational services Richard Kayombo made the remark during a one-day sensitisation seminar he conducted with journalists, which was held in Dar es Salaam.

He said many buyers do not know the importance of receipts for the goods they purchase, saying receipts help keep a good record of the financial transaction during auditing. Also he issued a directive to sellers to make sure they issue legal receipts to their customers for every purchase made or else the government would take to task business people who dare not comply.

With effect from May 15, a TRA task force will be commissioned to monitor all traders for making sure they issue receipt to their customers. The exercise will involve business people at all levels of capital investment, he said, emphasisng that they would take stern measures against those not complying, including revocation of their trading licenses.

In another development, a TRA senior officer Alvera Ndabagoye stated that there will be a penalty of between one and three million shillings for those who would fail to follow the rules.

TRA has started using Electronic Fiscal Devices (EFDs) System to enhance revenue collection and improve expenditure management. Ndabagoye said the use of EFDs has several advantages, like the fact that it will encourage sellers to issue receipts for all goods sold or service rendered and called on stakeholders for cooperation to ensure efficiency.

TRA is a semi-autonomous agency of the Government, under the Minister for Finance established with the major functions to assess, collect and account for all Central Government Revenue. Also, to administer effectively and efficiently all the revenue laws of the central government, advise the government on all matters related to fiscal policy and promote voluntary tax compliance. It is also responsible for improving equality of services to the taxpayers, counteracting fraud and other forms of tax evasion as well as producing trade statistics and publications.

Source: GUARDIAN ON SUNDAY

Rwanda’s successful emergence out of conflict and into financial inclusion

20 October 2015

Rwanda has managed to successfully emerge out of conflict and has expanded financial inclusion across the nation. “42 percent of Rwandan adults own a financial account, whether formal or informal, and 1.6 million have opened accounts in the country’s national SACCO savings and loan program”.

Claver Gatete shares his thoughts on this success, about how the country needs to ensure all people are financially included, to reach their national goals.

In order for the community to be financially included. “One thing we did was introduce micro-finance institutions, for example, our SACCO savings co-operatives, and made sure that these products grow, especially mobile usage.” Increasing access to mobile banking has become one of the biggest financial inclusion mechanisms. Mobile phones have bought financing capabilities closer to everyone in Rwanda, everything anyone needs is accessible and purchasable via a mobile phone. “The mobile phone has become a key enabler.”

Mobile phones are important to make banking more of a viable solution for the residents of Rwanda, but also are exceptionally important for “moving the money around, purchasing things, transferring money, and also paying for different services that are needed.” “By June 2016, we are completing a project to digitize everything.”

Read the original article: http://pulse.com.gh/finance/inclusion-hub-how-rwanda-became-a-financial-inclusion-success-story-id4254282.html

Four ways in which Avatar Technologies, a parent company of Global Voice Group, can help governments improve tax collection and boost their development

6 October 2015

Insufficient tax collection has been pinpointed as an obstacle to socio-economic development in emerging and developing countries. These countries often lack the technological means that would allow their government to control and promote tax compliance efficiently.

Tanzania, for instance, has seen its finances undergo what the World Bank refers to as a “deep change” in recent years. The population growth, dwindling foreign aid and stagnant tax revenues are putting the country’s finances under pressure. The US$6 billion collected in taxes last year covered less than 75% of the government’s expenditure, which is not sufficient to allow the government to invest in the infrastructure required by the rapidly expanding population.

As a result, The World Bank strongly recommends that Tanzania revamp its tax system, with a view to improving tax collection. Tanzania’s new system should be “simpler and cheaper”, “fair” and “transparent”, as per the World Bank’s three pillars of reform. It should also appeal to the citizens’ sense of responsibility when it comes to tax compliance.

Electronic tools have proved to be the best way to achieve better control of taxation, provided they have been specifically adapted to the country’s actual environment. As one of the aforementioned tools, Avatar Technologies’ Electronic Fiscal Declaration (EFD) solution has the capacity to optimize tax collection and compliance in the retail sector of emerging and developing countries, by stabilizing and supporting the World Bank’s three pillars of reform.

1. Avatar’s EFD solution is simple and affordable. For businesses, tax compliance may be as simple as adopting Avatar’s 5^th-generation sales-recording devices, which are affordable, user-friendly and come with free access to a useful online accounting application. Taxpayers also have the possibility to keep their already-existing devices, as the latter can be seamlessly integrated into the solution. They can even use their smartphones as a sales-recording device with the Avatar android-based app.
2. Avatar’s EFD solution promotes fairness. Currently, in Tanzania, close to 90% of the tax revenue is collected in Dar es Salaam. Avatar’s EFD solution can help broaden the tax base, as the sales-recording devices have a high level of autonomy, are resilient and allow for both remote audit and activation, which means that they can be used in businesses located in remote areas.
3. Avatar’s EFD solution promotes transparency. The solution gives the authorities easy and total access to sales- and tax-related data, thus improving tax collection and reducing tax fraud.
4. Furthermore, through its integrated Fiscal Lottery system, Avatar’s solution rewards the consumers who make a point of requesting their tax receipt after they have made a purchase. Avatar understands that it is crucial to involve the consumers, as they have the power to motivate traders to comply, simply by claiming their purchase receipt.

In the light of the above, it easy to see that Avatar’s EFD solution can effectively support the tax system of emerging and developing countries, as the World Bank conceives it. More than a mere tax management system, the solution will provide the government of these countries with an innovative financing mechanism enabling it to secure funds for development, while compensating for the dwindling flows of foreign aid. The combination of these advantages will certainly contribute to making these countries leaders in tax administration.

Read the whole article: http://www.globalconstructionreview.com/markets/tanzania-m8ust-colle6ct-mor0e-t2ax0e6s4-2fu08nd/