Tuesday 20 February 2018

Meet Africa's go-to guy for getting rid of corruption

Irishman left 'safe' job to become taxman in world's hotspots

Big Fish: Six developing countries have availed of Kieran Holmes’ expertise in tax and development issues since he quit his pensionable job in the Irish Revenue
Big Fish: Six developing countries have availed of Kieran Holmes’ expertise in tax and development issues since he quit his pensionable job in the Irish Revenue

Simon Rowe

Branded "the toughest taxman in Africa", Irishman Kieran Holmes has been stamping out corruption in some of the world's most dangerous trouble spots for 30 years.

Since quitting his "boring" Irish Revenue job in 1984, Trinity-educated Holmes has carved out a niche as the go-to guy for post-conflict countries looking to replace graft with growth.

Rwanda, Swaziland, Lesotho, Yemen in the Middle East, and now Burundi are just some of the countries that have availed of the Sligoman's expertise in tax and development issues since he quit his "safe, secure and pensionable" civil service job.

But his zero-tolerance approach to black market economies has come at a price. Generating tax revenue for governments in war-torn countries means making enemies. He has been kidnapped, had a cocked pistol pointed at his head, and his personal security team includes a retinue of armed guards with AK47s and bulletproof SUVs.

But despite his hair-raising experiences as chief tax collector in six developing countries over the past three decades, stories of corruption in Ireland still have the ability to leave him shocked.

Referring to a recent 'Late Late Show' debate following publication of journalist Frank Connolly's biography of property developer Tom Gilmartin, who fell victim to greedy politicians here, Holmes says: "My jaw was dropping because the corruption scenarios that were being discussed on 'The Late Late Show' were exactly the same mass corruption scenarios that I was encountering in Burundi.

"It was just amazing to watch. It was just like what happened here with politicians trying to insert themselves in the middle of deals and get a kickback. It's a reminder that the developing world has learned this from somewhere."

Drawing on his vast experience as Africa's 'clean-up guy', Holmes has learned the lesson that stamping out corruption has to start at the top. In 2010, when he was appointed chief tax collector in Burundi, one of central Africa's poorest countries, he told the country's president he wanted to send a strong message to government officials and the public that things were about to change radically.

Holmes immediately fired every tax official and set about recruiting new staff to replace those who had worked in the old revenue division of the finance ministry. Former officials could apply for the new jobs but only if they signed up to strict new codes of practice. In a further statement of intent, the warren of closed doors and private offices in the finance ministry were replaced by an open-plan headquarters. Openness and transparency were the new watchwords in government. In one fell swoop, the days of ministers overseeing a culture of backhanders and kickbacks were over.

"These projects are only successful if the president or the prime minister of the country is a real champion of the revenue authority," says Holmes. "This has been the single biggest factor in the success stories that I've been involved in. It can only work when that happens."

He also credits the development body TradeMark East Africa which provided $23m (€17m) funding to help Holmes purchase computers and pay for technical assistance and training for his staff in Burundi.

In the year before he took control of Burundi's tax agency, the country's tax take was 300bn Burundian francs (€176m). As he prepares to leave the job next month at the end of his contract and hand over to local officials, Holmes' record shows that during his tenure the tax take almost doubled to 560 million Burundian francs.

Burundi is now seen as a leading reformer across Africa. Job done for Holmes. Time to move on to the next adventure.

Now aged 61, Holmes admits he never had a career masterplan. His first overseas job as chief tax collector to the Pacific island of Kiribati –a coral atoll two metres above sea level – happened "by accident".

"A friend of mine told me he had seen a job advertisement in a British Sunday newspaper from some queer place in the Central Pacific looking for a taxman. I had no idea where Kiribati was, I had to look it up in an atlas. It was fascinating, something completely new and I couldn't wait to give it a shot," he says.

The advert had been placed by Britain's Overseas Development Administration.

When Holmes was handed a contract in 1984, he grabbed it with both hands. At the age of 31, he left Ireland with his wife and family and took charge of the tax administration of Kiribati where he was responsible for a 400pc sustained increase in revenue during his six years there.

"Everyone in the Revenue thought I was nuts," he recalls. "To leave a safe, secure and pensionable position. They all thought I should be a good boy and carry on working 40 years for my pension."

But instead of severing all links with Irish Revenue he took a career break instead. "So long as you're working for developing countries you can get leave without pay," says Holmes. "It was a safety net in case everything went wrong, that I could come back. But really I had no intention of coming back at all."

However, when he first landed on the small island of Kiribati – with a population of 100,000 spread over 800 square kilometres – and moved into his sparsely furnished official residence, complete with mattresses on the floor and no curtains on the windows, he admits he did have second thoughts.

"I remember thinking to myself, 'the plane has gone' and 'what have I done?'," he laughs. "But after the initial shock you realise that you're living in 30-plus degrees all the time and you've got the ocean on one side of you and a lagoon on the other. We made the best of it and it was fantastic. In fact, it was a real wrench leaving Kiribati six-and-a-half years later."

When it comes to persuading developing countries of the need for improved tax administration, Holmes has a simple mantra: "No country ever got rich through corruption. People get rich through corruption."

"No country has a path to development without a strong revenue authority," he says. "That's true of all countries. It is crucial to economic development. It sounds counterintuitive to say to people that you want to take money from them to make them better off but in fact that's what you do; you have them pay their taxes, this means they're not paying corruption. And if the taxes are used for economic development and infrastructure building then you get a better environment for business and then more growth comes and more profit and people get jobs and you grow the economy."

But corruption remains endemic in Africa. And the continent is continuously being bled dry by corrupt elites, warns Holmes.

The figures speak for themselves. The volume of transfers out of Africa in the last 30 years have exceeded transfers into Africa by $1.4trn (€1trn), according to the African Development Bank. "This effectively means that Africa is financing development in the rest of the world," he says. "What's coming into Africa is aid, foreign direct investment and emigrants' remittances. What's going out is corruption, through tax havens, hidden bank accounts and the effects of transfer pricing.

"It means Africa is contributing far more to the development of the rest of the world than the rest of the world is contributing to Africa's development. If this $1.4trn sum is true it also provides us with a measure of the benefits to be gained by helping countries introduce more transparent fiscal systems and by combatting the ease by which some countries and entities can offer bank secrecy and systems to deliver opaque ownership of assets, much favoured by corrupt elites," he says.

Holmes may be about to clear out his desk in the chief tax commissioner's office in Burundi's capital Bujumbura, but he gives the distinct impression of a man who's mission to clean up Africa for the betterment of its people is far from over.

A clue to his determination lies in a George Bernard Shaw quote he attaches to all his emails, which reads: "The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man."

Getting corrupt elites in Africa to see that his way of doing business makes better sense clearly demands an "unreasonable" approach, but one suspects Kieran Holmes' success to date owes more to the fact that he has a big heart for the troubled continent and its wonderful people.

Sunday Indo Business

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