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Africa is starting to tackle tax evasion efficiently, Global Forum/AfDB say

The Tax Transparency in Africa 2020 report shows growing success for the continent’s efforts to boost revenues and curb illicit financial flows

Ghana News Agency (Accra) – African countries made great strides in strengthening commitments and capacity to achieve tax transparency and exchange information on illicit fund flows in 2019, the latest Tax Transparency in Africa report has said.

Tax Transparency in Africa 2020 said that African countries need to engage further in revenue mobilisation, a concern sharpened by the backdrop of the global coronavirus pandemic.

Profit shifting and money laundering

The report, which was launched virtually, provides comparable tax transparency statistics to assist decision-makers to address illicit fund flows.

The 2020 report covers 32 Global Forum member countries and three non-members: Angola, Guinea Bissau and Malawi.

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

Illicit financial flows (IFFs) in Africa are estimated at between $50 billion and $80 billion annually; 44% of Africa’s financial wealth is thought to be held offshore, which corresponds to tax revenue losses worth roughly $19 billion.

Participating countries show significant advances on Amnesty International’s two core pillars: raising political awareness and commitment and developing capacities in tax transparency and exchange of information.

Maria José Garde, chair of the Global Forum, chaired the live event. Among the other participants were the head of the Global Forum Secretariat, Zayda Manatta; the executive secretary of the African Tax Administration Forum (ATAF), Logan Wort; Marcello Estevão, global director for macroeconomics, trade and investment practice with the World Bank; and the African Development Bank’s director for governance and public financial management, Abdoulaye Coulibaly.

Proactive role for Africa

Ms Manatta praised African countries’ growing proactive role in tax transparency and affirmed the benefits of existing information-sharing tools.

“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.”

Abdoulaye Coulibaly of the AfDB 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 a significant impact on domestic resource mobilisation, the achievement of the Sustainable Development Goals and other regional aspirations, including the African Union’s Agenda 2063 and the Bank’s own High Fives.”

The coronavirus pandemic recalls the critical importance of domestic resource mobilisation in Africa, Coulibaly said, in particular in relation to tax transparency and the fight against illicit flows. Such measures 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 African Development Bank, ATAF and World Bank. The Global Forum has a dedicated, independent secretariat based at the OECD’s Centre for Tax Policy and Administration.

The African Development Bank, an observer at the Global Forum since 2014, also participates in the Africa Initiative.

The bank promotes African tax transparency by supporting institutions and non-state actors in its regional member countries and strengthening international co-operation to eliminate IFFs.

The 2020 report was produced by the Global Forum for Transparency and Exchange of Information for Tax Purposes, the African Union and the African Tax Administration Forum, in close partnership with the African Development Bank.

Source
Ghana News Agency
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