Are Corporation Tax Breaks a Veil of Imperialism?
Taxation is the vertebral cord of economic development; it is the means by which governments finance their expenditures by imposing charges from time to time on citizens and corporate entities. The contemporary fierce competition between governments in Africa to attract Foreign Direct Investments via fiscal incentives has become a global phenomenon boosting multinational companies’ financial vaults in greater proportion whilst the concept is shredding the tap roots of economies in developing countries. (Photo: Thonkla Bangura., author)
Meanwhile, according a member of Christian Aid on the BBC Radio 4 on the 24/02/2014, stated that the International Monetary Fund (IMF) which is run by the tough guys in the NORTH has urged African leaders to minimise corporate taxes in order to attract foreign investors and raise taxes on domestic food products instead to subsidise the gap of tax incentives given to rich foreign investors. Conspicuously, any increase of taxes on food products in developing economies will definitely trigger an earthquake of financial burden on ordinary peasants who are already struggling to put food on dinner tables during this harsh financial austerity slamming the shores from North to South.
Economically deficient developing economies rely heavily on tax holidays and import duty exemptions to lull in corporation’s bourgeoisie keen to exploit our minerals resources. Notwithstanding the influx of multinational companies are game changers for economic development if fair play prevails. But frankly, some of these racketeering tax holidays are unreasonable and questionable incentives obviously undermining the dying economic independent require by developing economies to enjoy financial freedom in the quest to meet its set objectives or burden to create jobs for its youthful workforce and engage in infrastructural development badly needed change our infrastructural landscape, feed the surge of foreign investors and the fiscal circle of globalisation. Fair play and good ethical practices in paying corporation taxes will enhance social mobility or social justice and financial independent that will bridge the gap of economic inequality in developing economics.
Gigantic tax incentives should not be the ultimate price Africa has to pay to win the hearts and minds of foreign investors in order to attract tsunami transfer of technology and capital as a result of decades of bad investments, weak financial and technological landscape which makes us less able to independently finance domestic projects especially in the mining sectors. South African and Kenya top the list where corporations are immune from paying corporate taxes vital source of domestic income that will rejuvenate our weak economies.
Despite the benefit of FDI’s, the level of tax breaks for multinational companies that are clearly richer than majority of African States is a double whammy which is physically threatening and damaging the health of our economic survival as we are thriving for economy sovereignty thru our minerals chattels.
Paying corporate tax on the face of it is equivalent to honouring corporate social responsibility and being good global citizen upholding ethical norms. Tax avoidance by wealthy multinationals companies has to be labelled as a serious criminal offence because it encourages economic vandalism and protect the aggressive pattern incorporated as policy of FDI’s economy strategy which is equally affecting Western states.
Having said that, to be candid what African leaders should bear in mind is that the key driver or indicator in luring FDI’s to invest in our respectable countries as genuine partners is to have better infrastructures and well educated workforce to feed the demand and skills required by these companies this is pivotal to attract foreign investors in developing countries not merely bribery them with tax breaks. Tax generosity, weak legal framework and dilapidated academic system physically break the trend of economic development, social justice and fiscal equality.
Explicitly, we need an honest and open discussion across the continent to implement an effective and uniform bilateral economic framework tailored to address the unfair demands for tax incentives because many African countries are struggling with the prerequisite to entice rich foreign investors with huge tax breaks which aggressively undermines the life line for economic control.
The flagrant failure to attract enough taxes from FDI’s in the pursuit to feed tangible domestic projects thru our national chattels will disgracefully and incessantly lead us to too much reliance on Foreign Aid or hand-outs even though we are blessed with countless minerals. Foreign hand-outs entertain laziness, stereotyping, colonialism and dependency. Africa should not be the last man standing when music stops. Royalties and taxes given to some countries outside Africa like Norway and Qatar, the dichotomy is greater. This is because those countries put national interest first.
Sheer economic independent is equivalent to freedom of expression a fundamental human right and sovereign right that has to be cherished and protected. African leaders should therefore keep their heads up when negotiating with corporate bourgeoisie because tax dodgers and unfair corporation tax breaks causes economic malnourishment but creates financial supremacy for FDI’s and subsequently damage the ability of national sovereignty!
Thonkla Bangura
Stay with Sierra Express Media, for your trusted place in news!
© 2014, https:. All rights reserved.
