Tax, previously relegated to the background as simply another cost of doing business, is high on the agenda of CEOs and boards of multinational enterprises (MNEs)—and small and medium enterprises (SMEs) in global trade and international business.
Paradoxically, at a time when countries in East Africa are using tax and investment incentives to attract foreign direct investments and to stay competitive with other regions offering similar incentives, the veritable magnitude of changes in tax policies and laws made in recent years necessitates that directors and senior executives of MNEs—and the preponderance of SMEs—give due consideration to tax issues.
Currently, beyond maximising shareholder value, there is growing concern about the handling of negative publicity, enduring heightened pressure from nonprofit advocacy groups to take less aggressive tax positions, and getting to grips with the impact of tax on business decisions. At the same time, community expectations of private sector companies in East Africa to pay their “fair share of taxes” are increasing.
Against this backdrop, companies need to deliberately devise appropriate tax planning strategies and to actively engage senior executives, the board, and the finance and tax executives.
A factor further complicating the intrinsically technical field of tax is the fast pace of changing policies and laws as the region’s tax authorities cope with the upshot of rapid technological innovations, global interconnectedness, disruptive business models, and the new era of talent mobility. Moreover, contemporary tax policies and laws are built on centuries-old principles and goals.
From these observations, we can appreciate the significant scale of the changes and their possible lasting consequences on business, trade and investment activities.
Source: The East African
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark East Africa.