Tax & Child Rights Guide

Tax revenue can assist governments to finance development and reduce dependence on foreign aid, debt and foreign direct investment among other volatile sources of finance. Moreover tax revenue can be used to increase investment in children related activities/sectors and thereby helping governments better the livelihoods of children, and also secure and guarantee a bright future for children and their countries. However, tax-motivated illicit financial flows and base erosion and profit shifting practices such as tax evasion, tax avoidance, aggressive tax planning, undermine these efforts thereby eroding the tax base and weakening the ability of African governments to mobilise domestic revenue. This ultimately results in African governments collecting insufficient revenue to improve investment in children related public services sectors such as education, health and security. By doing so it contributes to ‘missed taxation opportunities’.

This guide explains sector terms and helps tax and child rights practitioners navigate tax and child rights debates. It also gives an overview of the interplay between tax revenue losses and lost opportunities to improve investment in children. It further discusses how closure of tax loopholes could help improve tax revenues and give a greater platform/potential for African governments to improve investment in children.