( 5 minutes read)
· Significant progress has been achieved by many African countries in the fight against tax evasion and money laundering, according to the recent report of the Tax Transparency in Africa
· The number of EOI requests sent by African countries increased more than eightfold since the start of the Initiative in 2014, report points out
· These developments helped eight African countries to secure USD 189 million extra revenue between 2014 and 2019
Significant progress has been achieved by many African countries in the fight against tax evasion and money laundering, according to the recent report of the Tax Transparency in Africa. This reaffirms their commitments and building their capacity to achieve tax transparency, the report noted.
The report shows the progress was achieved on the two pillars of the Initiative: (i) raising political awareness and commitment among countries, and (ii) developing capacities in tax transparency and exchange of information (EOI). Tax transparency and EOI have a crucial role to play in helping African governments stem illicit financial
flows (IFFs) and increase domestic revenue mobilization, according to the Transparency Report.
African countries’ EOI network has been expanding rapidly. It reached 3 262 bilateral relationships in 2019, compared to 685 in 2013. The number of EOI requests sent by African countries increased more than eightfold since the start of the Initiative in 2014, report points out. These developments helped eight African countries to secure USD 189 million extra revenue between 2014 and 2019.
More countries are coming forward for automatic exchange of information (AEOI). Ghana started exchanging in 2019. Countries like Mauritius, Seychelles and South Africa entered the AEOI network. Nigeria is expected to be on board in 2020. Morocco is expected to join in 2021. Five countries are being helped to move towards the implementation of this standard. Interest in AEOI had been awakened by the remarkable outcomes of voluntary disclosure programs. Countries like Nigeria and South Africa mobilized additional resources US$ 82
million and US$ 296 million respectively through voluntary disclosure programs.
However, African countries face many challenges in ingraining transparency in the tax system. They have limited staff’s knowledge, the availability of beneficial ownership information and the effective implementation of AEOI. In order to mitigate these difficulties, OECD has been organizing training programs since 2015 and more than a thousand officials from 44 African countries have been trained.
