{"id":18174,"date":"2011-01-10T16:07:18","date_gmt":"2011-01-10T21:07:18","guid":{"rendered":"http:\/\/www.sierraexpressmedia.com\/?p=18174"},"modified":"2011-01-10T16:07:18","modified_gmt":"2011-01-10T21:07:18","slug":"taxes-problem-technology-solution","status":"publish","type":"post","link":"https:\/\/sierraexpressmedia.net\/?p=18174","title":{"rendered":"Taxes (Problem) & Technology (Solution)"},"content":{"rendered":"

Jan. 8, 2011 – TAXES :<\/span> Web surf these days and one comes up with almost unlimited number of proposals on how to produce new revenue streams, for ailing governments.\u00a0 The first option is to improve the efficiency of revenue collection that is already in place.\u00a0 It is amazing how much more money governments are coming up with.\u00a0 Simply adding interest and penalties on late payments is adding decent amounts to the coffers. (I have yet to hear of incentives to revenue collectors who are given a percentage of the receipts.)\u00a0\u00a0 Every citizen is expected to pay their various taxes.\u00a0 The retailer collects taxes on behalf of the government.\u00a0 The retailer therefore needs good record keeping to prove the government is getting everything due.\u00a0 One advantage of such scrutiny is that governments will use this information in their development planning, and then store for research and archival purposes.\u00a0 Governments are then able to see the spending habits of their populations, to produce legislation, in consultation with the populace, that will improve the lives of the citizens.\u00a0 Using Freedom Of Information acts, citizens, governments and businesses will be able to use this information to build business models for whatever activities are planned.\u00a0\u00a0\u00a0\u00a0 As long as the information is gathered in the correct manner and form, it becomes a gold mine for government and citizens alike.\u00a0 (Photo:\u00a0 Sewanu Kponou, author)
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The above picture is what should happen in a progressive society.\u00a0 However the reality in a lot of \u00a0African countries differs.\u00a0 The size of the gap in the difference between \u201cprogressive\u201d and African countries is determined by the party concerned, purely subjective.\u00a0 The value of each groups\u2019 approach is also purely subjective.\u00a0 The fact of the matter is that in nations\/countries\/societies where the idea of taxation for the common good is almost foreign then the challenges are different.\u00a0 In Sierra Leone for example I am going to hazard a guess that there are no more than 6,000 structures, commercial or residential, in Freetown, that \u00a0are taxed.\u00a0 I will not make such a guess about the situation in the rest of the country, since I feel that, percentage wise, it will be even less outside of Freetown.\u00a0 I am using property taxes because a good percentage of revenue for \u201cprogressive\u201d societies comes from property taxes.\u00a0 I do not know the extent of taxation on business and how they are assessed.\u00a0 However, based on information coming from a long time business person in Freetown, \u00a0\u00a0the amount taxed is a trade-off of the amount of bribe requested by the assessor and what you are willing to pay for a false\/bloated assessment.\u00a0 How the assessors arrive at their figures beats the imagination.\u00a0 Most businesses are cash based and do not have registers to ring up sales or issue receipts.\u00a0 Most retailers buy from the wholesaler on a cash basis with no receipts issued.\u00a0 The wholesaler may be the importer and may therefore carry documentation of what was imported, if not we have another layer of transactions without documentation.\u00a0 The same applies to the farmer growing his crops and selling without any form of documentation.<\/p>\n

We now have a picture of a country that does business without documentation for the majority of transactions.\u00a0 If there is no indication of the amount of business been done how can any accurate decision be made, as to how to tax the individuals and companies?\u00a0 The question of illiteracy rears its ugly head in a discussion like this.\u00a0 How is the issue of illiteracy addressed in the grand scheme of things?\u00a0 For illiteracy to be addressed more schools will have to be built.\u00a0 However, construction and operation of schools come from revenue collected.\u00a0 It seems like we are going in a circle.\u00a0 Like other goods and services provided by the government, there is a cost associated with the provisioning of these services.<\/p>\n

The indications on the ground are that the neo-colonialists (NGO\u2019s and donor governments) have not stepped up to the plate.\u00a0 Therein lies the problem.\u00a0 Virtually everything been done in the country comes with the blessing of our new national parents, donor countries and NGO\u2019s.\u00a0 One wonders how did \u00a0these governments get the money to fund these projects.\u00a0 Is it possible that taxation played a part?\u00a0 It is rather sad that very few companies and individuals pay commensurate taxes, if any at all.\u00a0 If the average consumer is made to realize the importance of taxation, I do believe that there will be a lot of support for taxation laws to be implemented.\u00a0 If there is not much support for taxation then what are the reasons?<\/p>\n

Bai Bureh, and others in history, fought for representation, because they were been taxed, but not represented in the decision process.\u00a0 For many a government, that (taxation), is not a good road to travel.\u00a0 It means that Joe & Jane Citizen will now want to know what is happening to their taxes that have been paid.\u00a0 It is therefore easier to be a donor recipient and be given<\/span> a pittance than to face the questioning of your own people.\u00a0 People who do not pay taxes will not expect much in return, because they have not had to pay for anything.\u00a0 It simply means the country will lag with modern day facilities and infrastructure.\u00a0 Dependence on donor handouts will never create meaningful development, because these handouts can never amount to anything that will enable real development.\u00a0 Donor handouts are similar to smoking on bees when you need to extract the honey from the hive.<\/p>\n

TECHNOLOGY<\/span> –\u00a0 to the rescue \u00a0\u00a0\u00a0\u00a0If there is going to be any relief, then\u00a0 digital<\/a> <\/a>wallets<\/a>, if the governments want to utilize them, can be a step in the direction of garnering information about business transactions. Digital wallets is basically the digitizing of money and putting on an electronic device (cell phones), not unlike an ATM card.\u00a0 These come in handy and reduce the amount of cash carried around, especially in areas where there are no banks.\u00a0 MPESA<\/a> alone has done in excess of Sh600Bln (approx. US$ 7.5bln) over 4 yrs. of transactions, and it is just one of a growing list of companies.\u00a0 In articles read thus far I have yet to find one that indicates how governments are making use of the information garnered from these transactions to help in revenue collection and planning.\u00a0 At this point I cannot see any\u00a0 reason why governments should not actively promote this new form of \u201cbanking\u201d.\u00a0 My stress has been on using this system for information gathering, for without accurate information, planning is a pipe dream, as is evident by the many white elephant projects that abound in Africa.<\/p>\n

The final solution to the problem of development is not going to come from $3mln to $10mln projects, of which half the amount never left the benevolent donors shores anyway.\u00a0 The various underdeveloped countries have to get their revenue generation in order by first cutting fat, (bloated patronage laden government offices and agencies) and encouraging local entrepreneurs (capacity building) to thrive, so that they stop losing huge sums on consultancy and development, to external individuals and groups.\u00a0 Finally, in Africa, without regional trade and much more economic cooperation, by sharing of resources, the region is doomed to stay underdeveloped.<\/p>\n

By Sewanu Kponou,\u00a0 Atlanta, Ga., USA<\/em><\/p>\n

Stay with Sierra Express Media, for your trusted place in news!<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

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