A holistic, informed approach is helping developing countries to find simple and effective taxation solutions.

It is very important to look at tax systems in a wider context, to see the bigger picture

Peter Harris

The ability of Professor Peter Harris of the Faculty of Law to see the woods for the trees when it comes to the complexities of tax law has placed him in a unique position. His ‘big picture’, no-nonsense approach means that he can give effective, realistic advice to developing countries and help them to create tax law systems that are truly fit for purpose.

Harris has a sharp eye for what makes a tax system effective and where problems may arise. Out of this, he has developed an invaluable tool – a framework for a sound, workable tax system that can be shaped according to need.

As part of a package of support offered by the International Monetary Fund (IMF) to developing countries, Harris uses the framework as a starting point to assist in drafting tax laws that accurately reflect the particular needs of an individual nation.

In 2000 Ghana passed into law a major reform assisted by Harris, and in 2010 he was invited back to review and help redraft it in the light of new oil discoveries. Both Nepal and Tanzania have successfully implemented new tax laws assisted by him, and Sierra Leone, Malawi and Nigeria are all in the process of considering some of his suggestions.

And because his unique approach also impressed the United Nations, it has used his research in in a number of publications designed to assist developing countries, giving his work global reach.

 

Closing the loopholes

Having a tax system that works is vital to a country’s stability and prosperity. The system must allow tax revenues to flow in, while being fair and easily understood by those who actually pay the taxes. Added to this, it has to be consistent with international treaties and the laws of other countries.

Taxation systems are often created piecemeal, with rules being changed or added over time. This can result in a disjointed system, dogged by loopholes and inconsistencies. For example, UK tax laws run to over 10,000 pages of legislation, and include at least five different ways of dealing with change of corporate control.

Similarly, many Commonwealth countries have been left with out-dated colonial tax systems that were amended in a haphazard way, resulting in unnecessary complexity.

In order to attract much needed investment, and maximise the potential of natural resources such as oil or gas, developing nations need a robust, integrated and straightforward tax system. And it needs to fit into not only the particular needs of their country but also the wider international picture.

 

Seeing the bigger picture

Harris’s holistic approach has emerged from many years of studying national and international tax systems, particularly in developing countries. The broad knowledge and understanding he has gained enable him to look at tax issues in the round, and identify where change is needed.

Much research on international taxation takes a narrow approach, focussing on particular rules and simply examining them in their current setting. Harris, by contrast, achieves a wide-angled view. His research provides a map of a tax system, highlighting intersections and dead-ends, and placing it within its global context.

Before drafting tax law for any particular country, Harris spends time there gathering information, negotiating with authorities and finding out what is needed. He then creates a tailor-made model which is put forward to the government as an official IMF proposal.

Harris’s extensive knowledge, his sensitivity to the political and legislative climate of the countries he advises and his straightforward approach, bolstered by the targeted realism of the IMF, makes for a winning partnership that has helped many developing countries look confidently to the future.