Central African Republic eyes better revenues linked to tax reforms

The Central African Republic, once considered one of Africa's most fragile states, is making strides towards enhancing its revenue streams through tax reforms aimed at curbing illicit financial flows and increasing income from its vast mineral resources that have long been exploited due to years of civil unrest. In an exclusive interview with CNBC Africa, Dr. Jean Galvanis, a Member of Parliament in the CAR, shed light on the country's efforts to revamp its tax laws and promote tax justice and equity. Dr. Galvanis highlighted the pervasive issue of illicit financial flows, not just in the CAR, but across the continent and globally. He emphasized that despite the country's wealth in resources such as gold and minerals, the weak governmental system has allowed foreign entities to exploit these resources, leading to significant revenue losses. Dr. Galvanis revealed that the CAR loses an estimated one billion CFA francs monthly in tax revenue, funds that could otherwise be allocated to crucial sectors like education and healthcare. The economic challenges faced by the CAR are profound, with a GDP of approximately three billion CFA per year for a population of six million spread across a vast territory of 620,000 square kilometers. The country's inability to invest in essential infrastructure, schools, and hospitals has perpetuated its status as one of the poorest nations in Africa and the world. Dr. Galvanis underscored the urgent need for tax reforms to bolster the country's economy and improve the standard of living for its citizens. In response to promoting tax justice and equity, Dr. Galvanis emphasized the importance of accountability within the government to ensure tax compliance and fairness in the taxation system. By collaborating with international organizations like the United Nations, the CAR is working towards formulating new tax laws to combat illicit financial flows and generate additional revenue for socioeconomic development. Furthermore, Dr. Galvanis discussed the critical role of partnerships in advancing African countries' economic progress. He outlined the dual approach of engaging with global bodies through government channels and mobilizing parliamentarians through platforms like APNIFT to address issues of illicit financial flows and strengthen taxation systems. Looking ahead, Dr. Galvanis emphasized the need for a united front in combating illicit financial flows, stressing the importance of a cohesive strategy to ensure fair revenue sharing among countries. As the CAR continues to navigate its abundant mineral resources, Dr. Galvanis highlighted the imperative for sustainable measures to maximize revenue and foster economic growth. In conclusion, the Central African Republic's commitment to tax reforms and collaborative efforts with the global community signal a promising trajectory towards improving fiscal governance, curbing illicit financial activities, and harnessing the full potential of its mineral wealth for the benefit of its populace.