BREXIT & RWANDA : MaxFac Border Solutions Operate in a Country Like Rwanda, so they Can Work for the Irish Border Too

Kieran Holmes is a former Inspector of Taxes with the Irish Revenue who later spent eight years working in Rwanda managing the UK’s Rwanda Revenue Authority Project, then served for four years as Commissioner General of the revenue authority of Burundi. He has latterly worked in Ethiopia and South Sudan and now lives in Kent. By Kieran Holmes



Globalisation and the rapid expansion of world trade and investment has fuelled the massive drop in poverty levels that has occurred globally in the last four decades. Nevertheless, there remains a group of about 31 countries that are seriously off-track in their development efforts and unless radical efforts are made, this group will contain 80% of the world’s poor at a time when the UN’s Sustainable Development Goal of ending world poverty is meant to be realised.
Drawing on my career as a tax consultant who has spent the past 34 years helping governments grow their domestic revenues, my new paper published by The Red Cell argues that tax reform – including a strong anti-corruption component – should be the primary tool in the fight against poverty. It asserts that a country growing its own revenue base can provide far more finance for necessary infrastructure development than could be provided by international development assistance.
Growing domestic revenues reduces aid dependency and empowers a country to make its own choices. Properly carried out, such policies will grow the economy, provide jobs and permit the government to invest in the required infrastructure needed for further growth and expansion.
In 2015 the international community promised to double the amount of funding available for such DRM projects as part of the Addis Tax Initiative but, so far, there appears to be little evidence that this promised additional spending has actually materialised. International trade is the engine of the global economy and a key component of economic development is the speedy transition of goods across borders.
DFID has been a major player in helping countries to trade more efficiently. A study of such work outlines the border initiatives that have taken place in the developing world in recent years, using Rwanda as an example. These include one-stop border posts, small trader exemptions, electronic single window systems, electronic declaration and payment systems, authorised economic operator schemes, electronic cargo tracking and post declaration audits that work to make borders invisible.
These measures for speeding the transit of goods across borders that were used in Rwanda and elsewhere are all measures that have applicability across each and every border, although the extent will vary in each case. These measures constitute best international practice and are sometimes collectively referred to in the UK as maximum facilitation, or “MaxFac” for short.
The two factors that are paramount in modern border management are strong, trusting and active cooperation between trading partners and the ever-increasing reliance on automation and better working procedures. In the global economy, goods must cross borders seamlessly and speedily. It is fairly obvious that the Irish border issue is primarily a political rather than an economic or security one and is therefore capable of political resolution. With goodwill on both sides there is no doubt that the current border without physical infrastructure can be maintained and people living along the border and traders who use it should notice little disruption in the post-Brexit era.
Britain is a predominantly services-based economy that currently trades more with the rest of the world than it does with the EU, whose share of world trade is in decline. It is hardly surprising therefore that the UK would want to have the freedom to write its own trade deals and to be free of the constraints of the EU Customs Union.
Clearly a negotiated free trade agreement with the EU delivering benefits for both sides and providing as much friction free trade as possible is the desired outcome and this of course remains the UK’s main goal. The lessons from international development are that MaxFac systems work but a key element is the development and communication of a strong vision for a post-Brexit Britain.