As a result of fraudulent schemes perpetrated by governments and multinational companies who have been avoiding tax payments to some of the world’s poorest countries, Africa has been losing over $50bn yearly, says ANAN.
Africa- Tax Evasion has received a renewed drive during the recently held Association of National Accountants of Nigeria, ANAN’s International Fraud Summit.
In this light, the Chairman of the summit, Prof. Adebayo Adejola took the time to speak about the negative impact of these illicit financial outflows especially tax evasion on the progress of African countries.
Prof. Adebayo mentioned that one factor that would greatly help the fight against fraud is having leaders with uncompromising integrity.
He also stressed the importance of graft agencies like the Economic and Financial Crimes Commission(EFCC) and the Independent Corrupt Practices Commission (ICPC) in the fight against fraud.
In addition, the President and Chairman of the Council of ANAN, Rev. Canon Benjamin Osisioma pointed out that the fight against fraud and corruption, especially in Africa, is the summit’s main purpose.
Africa- Tax Evasion: Findings of The Africa Initiative
The Africa Initiative is a partnership of the Global Forum on Transparency and Exchange of Information for Tax Purposes, which involves 33 African countries and 16 partners, including the African Development Bank, the African Union Commission, the European Union, and the governments of Switzerland, and the United Kingdom.
In a report titled “Tax Transparency in Africa 2022”, The Africa Initiative stated that, as part of the continuous fight against tax fraud, African countries’ requests for information for tax-collection purposes rose 26% over the previous year.
It mentioned that African countries had 4,135 bilateral exchange-of-information relationships in 2021, up from 913 in 2014, Fifteen countries sent requests for tax information in 2021, up from six in 2014, and Nine African countries collectively reported having collected €233 million since 2014 as a direct result of the exchange of information requests.
The report, which covers 38 African countries, documents the level of progress made by Africa in the fight against tax evasion and other illicit financial flows (IFFs) through transparency and exchange of information (EOI) for tax purposes.
During the launch of the initiative, the commissioner general of the Kenya Revenue Authority and chair of the Africa initiative, Githii Mburu, commended the Initiative for its hard work towards ensuring tax transparency standards during the difficult times occasioned by the Covid-19 pandemic.
Africa- Tax Evasion: Other findings from the report
It has been discovered that, since 2009, an amount of at least €1,2 billion in additional revenue has been identified in the region through activities such as voluntary disclosure programs, exchange of information, and offshore investigations.
In 2021, 1,500 African tax officials were trained in the use of exchange-of-information instruments.
According to an analysis of the report’s findings as presented by Zayda Manetta, the head of the Global Forum’s secretariat, African countries continued to experience substantial losses from illicit financial flows, estimated at US$50 billion to US$80 billion every year.
She mentioned that Covid-19 has forced an additional 29 million people into extreme poverty, so successfully curbing illicit financial flows would release much-needed resources in Africa.
Zayda advised that more African countries should use requests for information, and emphasized the importance of a system for the automatic exchange of information.
She also stated the need for more attendees in capacity-building training.
