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In 2021, Africa notches strong progress in building tax transparency, tackling illicit financial flows | African Development Bank

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African international locations’ requests for info for tax assortment functions rose 26% over the earlier yr, signaling continued progress towards tax transparency regardless of a difficult atmosphere,  in accordance with a report by The Africa Initiative, launched on Tuesday in Nairobi.

The Tax Transparency in Africa 2022 report, which covers 38 international locations, paperwork Africa’s progress in tackling tax evasion and different illicit monetary flows (IFFs) by transparency and alternate of knowledge (EOI) for tax functions.

The Africa Initiative is a partnership of the International Discussion board on Transparency and Change of Data for Tax Functions (The International Discussion board), 33 African international locations and 16 companions, together with the African Growth Financial institution, the African Union Fee, the European Union and the governments of Switzerland and the UK. 5 non-member international locations participated within the examine for the report.

“I want to applaud the members of the Africa Initiative for his or her dedication and resilience in implementing tax transparency requirements throughout the tough instances occasioned by the COVID-19 pandemic,” mentioned Githii Mburu, Commissioner Normal of the Kenya Income Authority and Chair of the Africa Initiative, throughout the launch.

Amongst different key findings of the 2022 report:  

  • African international locations had 4135 bilateral alternate of knowledge relationships  in 2021, up from 913 in 2014.
  • Fifteen international locations despatched requests for tax info in 2021,  up from 6 in 2014.
  • 9 African international locations collectively reported having collected €233 million since 2014 as a direct results of alternate of knowledge requests. Since 2009, a minimum of €1.2 billion in extra income has been recognized within the area by voluntary disclosure applications, alternate of knowledge and offshore investigations.
  • In 2021, 1500 African tax officers obtained coaching on the usage of alternate of knowledge devices.

Zayda Manatta, head of the International Discussion board Secretariat, introduced an evaluation of the report’s findings.

She mentioned that African international locations continued to endure important losses from illicit monetary flows, estimated at $50 billion to $80  billion yearly.  The Covid-19 pandemic has difficult Africa’s achievement of the UN sustainable growth Objectives. “Covid-19 has pushed a further 29 million folks into excessive poverty, so successfully curbing illicit monetary flows, would unlock a lot wanted assets in Africa,” she mentioned.   

Despite the report’s constructive findings, there may be room for African international locations to extend their use of tax transparency instruments, Manatta mentioned. As an illustration, though 15 international locations despatched requests for tax info in 2021, 4 international locations—Kenya, Tunisia, Algeria, Nigeria—accounted for 92% of these requests.

She urged that extra international locations ought to use requests for info. She additionally urged {that a} system for computerized alternate of knowledge wanted to be put in place. “Extra must be completed in Africa to extend ladies’s participation in capability constructing actions,” She identified that world wide a mean of fifty% of attendees in capability constructing coaching whereas in Africa it was 40%.  

The African Growth Financial institution, an observer to the International Discussion board since 2014, promotes African tax transparency by assist to establishments and non-state actors in its regional member international locations and by strengthening worldwide cooperation to eradicate illicit monetary flows.

To obtain the report click on right here. For the French model, click on right here.

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