‘African nations making headway on tax evasion, money laundering’

27Jun 2020
The Guardian
‘African nations making headway on tax evasion, money laundering’

African countries made great strides in strengthening commitments and capacity to achieve tax transparency and exchange information on illicit fund flows in 2019, according to the latest Tax Transparency in Africa report, launched on Thursday.

Tax Transparency in Africa 2020 is a joint production of the Global Forum for Transparency and Exchange of Information for Tax Purposes, the African Union (AU) and African Tax Administration Forum (ATAF), in close partnership with the African Development Bank (AfDB).

It underlines the need for African countries to engage further in revenue mobilisation, a concern sharpened by the backdrop of the ongoing global Covid-19 pandemic.

The report, published during a virtual launch, provides comparable tax transparency statistics to help decision-makers in addressing illicit fund flows. It covers 32 Global Forum member countries and three non-members: Angola, Guinea Bissau and Malawi.

“This annual publication of the Tax Transparency in Africa is one of the various efforts of the continent to advance global tax transparency and exchange of information agenda in Africa in order to combat corruption, tax evasion money laundering, fraud, base erosion, and profit shifting and illicit enrichment,” Victor Harrison, AU Commission Commissioner for Economic Affairs, says in the report’s preface.

Illicit financial flows in Africa are estimated at between $50 billion and $80 billion annually, with 44 per cent of the continent’s financial wealth thought be held offshore – which corresponds to tax revenue losses of Euros 17 billion.

Participating countries show significant advances on the AI’s (African Initiative) two core pillars: raising political awareness and commitment and developing capacities in tax transparency and exchange of information.

Global Forum chair Marie Jose Garde chaired the live event. Other participants included: Head of the Global Forum Secretariat Zayda Manatta; ATAF Executive Secretary Logan Wort; Marcello Estevao, Global Director, Macroeconomics, Trade & Investment of the World Bank, and AfDB’s Director, Governance and Public Financial Management, Abdoulaye Coulibaly.

Manatta praised African countries’ growing proactive role in tax transparency and noted the benefits of existing exchange-sharing tools, saying: “Requests for information directly translate into additional tax revenue and that’s what counts. We have five African countries identifying nearly $12 million in additional revenue, and eight African countries secured $189 million of additional revenue between 2014 and 2019.”

Coulibaly meanwhile said: “The African Development Bank firmly believes that collaborations with both regional and international partners are key to moving forward the agenda on tax transparency which has significant impact on domestic resource mobilisation, the achievement of the 17 global SDGs and other regional aspirations including the African Union’s Agenda 2063 and the Bank’s own High Fives.”

He said the ongoing Covid-19 pandemic “recalls the critical importance of domestic resource mobilisation in Africa, in particular in relation to tax transparency and the fight against illicit flows, in order to further protect populations against threats to their livelihoods”.

The Africa Initiative, which launched in 2014, is a partnership of the Global Forum, its African members and regional and international organisations including the AfDB, ATAF, and the World Bank. The Global Forum has a self-standing dedicated secretariat based in the OECD’s Centre for Tax Policy and Administration.

AfDB, an observer to the Global Forum since 2014, also participates in AI. The bank promotes African tax transparency through support to institutions and non-state actors in its regional member-countries and by strengthening international co-operation to eliminate illicit financial flows (IFFs).

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