According to World Bank experts, Africa was relieved of about US $600 billion in taxes in 2015 mainly on account of entering into preferential tax agreements with foreign countries. These are agreements mostly hawked by the multinational corporations of the host countries to reduce the tax liabilities in the home country. This is a little more than 50 times the budget of Côte d’Ivoire in 2018. This is a huge loss the continent is subjected to every year, depriving the resources of its inhabitants. Worst so, the findings of the multilateral bank reveal that the phenomenon is growing unabated. There are many ways that it is happening. One common way of milking the resource-rich continent is entering to preferential tax agreements that the developed, particularly the western world, entering into with the member states in the continent. The sweeteners they apply to such deals make the host local governments vulnerable. Coupled with arm twisting, making agreements one-sided and opaque and the common practice of greasing the palms of involved political machinery make things easier for the predating country, which depends on the rare earth and other resources of Africa to be used as industrial raw materials for value addition in their home country or elsewhere. There are several cases pointed out by agencies including World Bank how the multinational corporations negotiate their business deals so that they pay the least tax. Also, as pointed out in this column several times, there are such practices among some of the foreign companies operating in Africa to under invoice their exports or indulge in smuggling through mafia syndicates to escape even the little tax they pay to the exchequer. Such practices are widely found in the mining sector, particularly in gold, where the total resources mined do not tally with domestically sold and exported quantities. Such findings often surface. But the sad thing is that no serious follow up is done to bring the perpetrators of the crime to the books.
