At a recent workshop in Dodowa, Ghana, Tax Justice advocates and experts expressed worry over the situation where the tax burden in Africa is weighed heavily on workers while multinationals are handed tax incentives.
In the opinion of the tax justice advocates, the trend portrays an injustice in taxation. They also drew attention to many instances where national experiences and researches have pointed to the fact that tax incentives are only a microcosm of the factors that drive FDIs.
The trend has been that from Accra through Ouagadougou, Niamey, and Nouakchott to Lagos and Yaounde, the tax burden on workers has been steadily rising whereas that of multinationals has been decreasing.
They still haven\’t grasped the importance of tax incidence. Companies don\’t pay tax, people do.
In open economies the majority (if not the vast majority) of taxes upon capital are bourne by the workers.
If you\’re simply not willing to face up to this basic truth about taxation then you\’ve absolutely no business at all trying to change the taxation systems of an entire continent.
This isn\’t just a snark at Ritchie and his mates: they\’re actually so wrong in their analysis that they are going to make things worse, not better.