Africa scores United Nations win in opposition to tax avoidance

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On 22 November a decision from the Africa Group on the UN handed overwhelmingly, marking a step in the direction of a United Nations framework conference on worldwide tax cooperation. This may shift management of worldwide tax guidelines from the Organisation for Financial Cooperation and Improvement (OECD) – shaped of 38 richer nations – to the UN, the place the 193 member states are on a extra equal footing.

Governments in Africa rely greater than these elsewhere on tax yields from multinational firms – not least due to the difficulties they face in accumulating home tax. However these firms can – in the intervening time fairly legally – keep away from tax by reserving their income in low-tax jurisdictions.

In 2021 economists Javier Garcia-Bernardo and Petr Jansky estimated that this profit-shifting prices African nations about 7% of their whole tax revenues. The OECD framework has been described as “just about a colonial tax system”.

Reacting to the vote, Kenya’s everlasting consultant to the UN Martin Kimani noticed that the “voting report on an Africa-sponsored decision on worldwide tax cooperation is the clearest International North vs International South vote I’ve seen in current instances”.

Foyer group the Tax Justice expanded this: the 48 nations that voted in opposition to the movement “are chargeable for 75% of all nations’ losses to tax havens”. The 125 in favour included 51 of the 54 member states in Africa.


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