· A network of NGOs, including the Global Tax Justice Alliance, have estimated that tax evasion costs Africa more than $25 billion a year.
· The countries that top the list for tax evasion in Africa is Nigeria, followed by South Africa, Egypt, and Angola.
A network of NGOs, including the Global Tax Justice Alliance has estimated that tax evasion costs Africa more than $25 billion a year. Tax evasion in Pandemic times is too costly as it eats into critical revenues that could be spent on citizens’ health. The report alleges that multinationals, local or foreign, operating in Africa have taken away almost $23 billion from the countries in which they work. Another two billion is tucked away by rich Africans in tax havens.
The countries that top the list for tax evasion in Africa is Nigeria, followed by South Africa, Egypt, and Angola. But even Mauritius, which is considered to be a tax haven, has also suffered an estimated loss of $60 million. The Global Tax Justice Alliance estimates $427 billion revenue loss across the world annually from wealthy individuals and corporations abusing tax laws. According to the Global Alliance for Fiscal Justice on average in Africa, fiscal justice accounts for half of the national health budgets.
A recent OECD report has pointed out that such evasion is not always illegal since many multinationals, particularly in the mining sector, negotiate favourable tax conditions with states in exchange for their investment. This is hypothetically referred as tax optimization, making it legal. Nevertheless, capital flight hurts these economies. In other words, in times of pandemic, African countries could have spent these lost billions on fighting the Pandemic.
