A tax professional doesn’t merely crunch numbers; they shape economies, influence policies, and impact lives. Our compass? The Sankofa bird—a symbol of wisdom that gazes backward while soaring forward. I want to look at Kenya and Senegal. Why Senegal? For obvious reasons, because all our eyes are on Senegal. At the helm is a former tax man.
The Sankofa Principle: A Lesson in Reflection
The Sankofa Bird’s Wisdom
The Sankofa bird, revered in Akan culture, embodies the essence of learning from history. Its message resonates across generations: “Go back and fetch it.” We, too, must retrieve lessons from the past to illuminate our path forward. Let us unfurl the wings of knowledge and soar.
Colonial Exploitation and Unjust Tax Systems
African Nations’ Struggle
African nations bear the scars of colonial exploitation. European powers plundered resources, leaving economies fractured. Tax systems, once wielded as instruments of oppression, perpetuated inequality. The echoes of history resounds—a reminder that ethical tax practices are not mere abstractions but vital for justice.
Kenya, like a phoenix rising from colonial ashes, faced the challenge of rebuilding. The British Empire had extracted wealth, leaving behind a fragmented economy. Post-independence, Kenya grappled with tax reform. Missteps occurred, but they became stepping stones toward enlightenment.
Senegal, too, has its tale of tax injustice. A lopsided tax treaty with Mauritius allowed companies operating in Senegal to avoid paying millions in taxes. The right paperwork and clever maneuvers turned Senegal’s tax system into a “hell” for revenue collection12. In 2020, Senegal took a bold step—it tore up its double tax agreement (DTA) with Mauritius, marking the first time it ended a bilateral tax treaty. The estimated cost of this agreement over 17 years? A staggering $257 million in lost tax revenue1.
Kenya’s and Senegal’s Journeys
VAIDS and Senegal’s DTA Reversal
Kenya’s Voluntary Assets and Income Declaration Scheme (VAIDS) mirrored Nigeria’s earlier attempt. Launched in 2017, VAIDS aimed to broaden the tax base. However, hurdles emerged—insufficient data, corruption’s shadow, and enforcement gaps. The tax-to-GDP ratio remained stubbornly low, echoing past disappointments. Meanwhile, Senegal’s courageous move to end the tax treaty with Mauritius sent ripples through the African tax landscape.
Both Kenya and Senegal embraced the Sankofa principle. They dissected their tax systems, scrutinizing flaws. Transparency became their lodestar. By acknowledging past missteps, they laid the groundwork for reform. The Sankofa bird whispered: “Look back, but move forward with purpose.”
Kenya shifted its gaze, Senegal tore up agreements, and both countries prioritized fairness. High-net-worth individuals and corporations faced scrutiny. Authorities engaged stakeholders, emphasizing compliance. The tax nets widened, and ethical practices took root.
How are African countries guided by the spirit of Sankofa in reforming their tax systems?
Combatting Tax Avoidance and Evasion
Historically, tax evasion has been rampant in many African nations, depriving governments of much-needed revenue and exacerbating economic inequalities. Learning from past mistakes, countries like Ghana have implemented measures to combat tax evasion, such as strengthening tax enforcement mechanisms and promoting tax compliance through education and outreach programs. By addressing these challenges head-on, Ghana is forging a path towards a more equitable tax system that benefits all citizens.
Promoting Progressive Taxation
In the past, regressive tax policies often placed a disproportionate burden on low-income individuals and marginalized communities. Today, African countries are striving to rectify this injustice by advocating for progressive taxation models that ensure the wealthy contribute their fair share. For example, South Africa has implemented a progressive income tax system, where higher earners are taxed at higher rates, thus redistributing wealth and promoting economic inclusivity.
Enhancing Tax Transparency and Accountability
Colonial-era tax systems were often characterized by opacity and lack of accountability, enabling corruption and exploitation. In contrast, modern African nations are embracing transparency and accountability in taxation, guided by the principles of Sankofa. Countries like Nigeria have implemented reforms to enhance tax transparency, such as digitizing tax processes and improving taxpayer education. These initiatives not only increase trust between citizens and governments but also pave the way for more effective tax administration and revenue collection.
Addressing Historical Injustices
Many African countries grapple with the legacy of colonial-era tax policies that favored foreign interests over the needs of local populations. To rectify these historical injustices, countries like Kenya are exploring innovative approaches to taxation that prioritize local development and empowerment. For instance, Kenya has implemented tax incentives for companies that invest in marginalized regions, thereby promoting economic growth and addressing historical disparities.
Lessons for the Future ; Guided by Ubuntu and Equity
Transparency and Accountability. The Currency of Trust
Kenya’s and Senegal’s journeys underscore that transparency breeds trust. Citizens demand accountability. Taxpayers deserve clarity on how their hard-earned shillings shape the nation. The Sankofa bird nods approvingly—its wingspan a testament to openness.
Balancing Law and Equity. The Leopard’s Spots and Tax Policies
The leopard’s spots remain unchanged, but tax policies can evolve. Both countries seek equilibrium—enforcing laws while rectifying historical inequities. The Sankofa bird’s beak points toward justice, urging us to tread this delicate path.
Ubuntu. We Are Because of Each Other
Ubuntu, the heartbeat of African communities, resonates across Kenya’s and Senegal’s tax landscapes. We are interconnected—our destinies intertwined. Fair taxation uplifts all
The Sankofa principle reminds us of the importance of learning from past tax mistakes and striving for a fairer, more equitable future. By embracing the spirit of Sankofa, African nations can reform their tax systems to promote economic inclusivity, transparency, and accountability. As tax consultants, let us advocate for policies that honor the lessons of history and pave the way for a brighter tomorrow for all citizens.