Tax Transparency: Africa Provides Results

In 2021, Africa will make significant progress in the fight against tax transparency and illicit financial flows.
The African Development Bank promotes tax transparency in Africa by supporting companies and NGOs in its regional member states.

Requests for information from African countries for tax collection purposes by 2021 increased by 26% over the previous year, which shows the continued improvement towards tax transparency in Nairobi.

Communication is crucial

The “Tax Transparency 2022 in Africa” ​​report, which covers 38 countries, documents the progress African countries have made in combating tax evasion and other illicit financial flows.

The Africa Initiative is a global forum for transparency and information exchange (Global Forum) (https://bit.ly/3HCCjIB) for tax purposes uniting 33 African countries and 16 partners, including Africa Development. Bank, African Union Commission, EU and Governments of Switzerland and the United Kingdom. Five non-member countries participated in the study conducted for this report.

“I would like to congratulate the members of the Africa Initiative for their commitment and resilience in implementing tax transparency standards during the difficult times caused by the Covid 19 epidemic,” he said. கிதியி ம்புருCommissioner General of the Kenya Revenue Commission and Chairman of the Africa Initiative, at the beginning of the report.

Some of the key findings of the 2022 report are:

African countries had 4,135 bilateral exchanges in 2021, up from 913 in 2014;

Fifteen countries sent out tax information requests in 2021, up from six in 2014;

Nine African countries have jointly recovered 3 233 million in exchange of information requests since 2014. Since 2009, at least € 1.2 billion in additional revenue has been found on the continent through voluntary disclosure programs, information exchange and overseas investigations;

By 2021, 1,500 tax executives in Africa will be trained to use information exchange.

Losses range from $ 50 to $ 80 billion a year

Jaita Manatha, Chairman of the Global Forum Secretariat, reviewed the findings of the report. According to him, African countries continue to suffer significant losses due to illicit financial flows, which are estimated at $ 50 to $ 80 billion each year. The Covid-19 epidemic has complicated Africa’s record of the United Nations Sustainable Development Goals. “The Covid 19 epidemic has plunged an additional 29 million people into extreme poverty, so a significant reduction in illicit financial flows will open up much-needed resources for Africa,” he stressed.

92% of tax inquiries come from four countries

While the report’s findings are positive, African countries need to increase the use of tax transparency tools, Ms Manata said. For example, in 1521, 15 countries will submit requests for tax information, but 92% of these requests will come from four countries (Kenya, Tunisia, Algeria and Nigeria).

He urged African countries to make greater use of information requests. He also demanded the establishment of an automated communication system. “More efforts should be made in Africa to increase the participation of women in skills development activities,” she said, adding that on average, 50% of participants in skills development training are women, compared to 40% in Africa.

The African Development Bank, which has been an observer at the Global Forum since 2014, promotes tax transparency in Africa by supporting its regional member organizations and NGOs and strengthening international cooperation to eliminate illicit financial flows.