Paper short abstract:

Shifting focus to public-private-partnerships model as a sure means of implementing crucial and mega development projects in Africa in the face of diminishing tax revenue occasioned by international tax base erosion and profit shifting practises, especially by multinational enterprises.

Paper long abstract:

Tax revenue in the Global South, especially in Africa, is hampered by among other challenges, the escalation of international tax base erosion and profit shifting schemes practised by many multinational enterprises in their various jurisdictions of economic presence. These enterprises take advantage of schemes such as the vague definition of permanent establishment, for the purpose of determining and assigning taxation rights, double taxation treaties and the attendant "treaty shopping" tendencies by these companies, reduced accountability in the application of arms-length principle in pricing of the intangibles in related party transactions, among others. Tax revenue is also affected by emerging factors such as the emergency of the digital commerce and the problem of apportioning taxation rights in the face of less developed digital back borne infrastructure and lack of a synchronised economic systems due to informalities in the less developed jurisdictions. The other risk on taxation is the recent wave of litigating tax policy changes, especially in Kenya, that is seen to stall government efforts in resource mobilisation to finance development projects amidst skyrocketing public debt stock. To ensure redistributive development, this paper will suggest innovations that could be adopted to address tax and debt challenges and it would be shown that this, coupled with focusing on the public-private-partnerships model of financing selected high impact development project would yield much needed reprieve by shifting implementation of big development projects from the government budget system. This would create fiscal space to accommodate other critical budgetary needs for shared prosperity.