According to a report released on Tuesday in Nairobi by The Africa Initiative (https://bit.ly/3NdREQN), requests for information for tax collection purposes increased by 26% over the previous year, indicating sustained progress toward tax transparency despite a hard climate.
The Tax Transparency in Africa 2022 report (https://bit.ly/39DfjN9) documents Africa’s progress in combating tax evasion and other illicit financial flows (IFFs) through transparency and exchange of information (EOI) for tax purposes, and it covers 38 countries.
The Africa Initiative is a collaboration between the African Development Bank (www.AfDB.org/en), the African Union Commission, the European Union, and the governments of Switzerland and the United Kingdom, as well as the Global Forum on Transparency and Exchange of Information for Tax Purposes (The Global Forum) (https://bit.ly/3zNzYsp). The study for the report included five non-member countries.
“I wish to applaud the members of the Africa Initiative for their commitment and resilience in implementing tax transparency standards during the difficult times occasioned by the COVID-19 pandemic,” said Githii Mburu, Commissioner General of the Kenya Revenue Authority and Chair of the Africa Initiative, during the launch.
Among other key findings of the 2022 report:
- African countries had 4135 bilateral exchange of information relationships in 2021, up from 913 in 2014.
- Fifteen countries sent requests for tax information in 2021, up from 6 in 2014.
- Nine African countries collectively reported having collected €233 million since 2014 as a direct result of exchange of information requests. Since 2009, at least €1.2 billion in additional revenue has been identified in the region through voluntary disclosure programs, exchange of information and offshore investigations.
- In 2021, 1500 African tax officials received training on the use of exchange of information instruments.
Zayda Manatta, head of the Global Forum Secretariat, presented an analysis of the report’s findings.
She said that African countries continued to suffer significant losses from illicit financial flows, estimated at $50 billion to $80 billion every year. The Covid-19 pandemic has complicated Africa’s achievement of the UN sustainable development Goals. “Covid-19 has pushed an additional 29 million people into extreme poverty, so effectively curbing illicit financial flows, would unlock much needed resources in Africa,” she said.
Despite the report’s favorable findings, Manatta believes that African countries should improve their usage of tax transparency technologies. In 2021, for example, despite the fact that 15 nations filed requests for tax information, Kenya, Tunisia, Algeria, and Nigeria accounted for 92 percent of all requests.
She advocated for more countries to use information requests. She also argued that a system for automatic data interchange should be implemented. “More needs to be done in Africa to increase women’s participation in capacity-building activities,” she said, noting that women make up half of all attendance in capacity-building training around the world, but only 40% in Africa.
Since 2014, the African Development Bank (https://www.AfDB.org/en) has been an observer to the Global Forum, promoting African tax transparency by assisting institutions and non-state actors in its regional member countries, as well as by strengthening international cooperation to combat illicit financial flows.
To download the report click here (https://bit.ly/3baoSU1).
For the French version, click here (https://bit.ly/39GtXD2).
Contact:
Olufemi Terry
Communication and External Relations Department
African Development Bank
E-mail: media@afdb.org
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Africa’s premier development finance organization is the African Development Bank Group (AfDB). The African Development Bank (AfDB), the African Development Fund (ADF), and the Nigeria Trust Fund are its three independent institutions (NTF).
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