The 2021 Tax Transparency report has shown African countries reported significant progress on tax transparency in 2020.
According to the report released on Wednesday, African countries strengthened their ability to recover funds held offshore, directly boosting national tax revenues.
In the review year, African countries reportedly identified more than €34.8m ($43m) in additional taxes due to Exchange of Information on Request relative to €14.3m in 2019.
It revealed that since 2009, exchange of information enabled African countries to identify over €1.2bn of additional revenues in tax, interest and penalties.
The trend signalled continuous progress in the fight against illicit fund flows out of Africa, estimated at $50bn each year, the report indicated.
It further disclosed that in 2020, African countries, for the first time, sent more exchange of information requests than they received.
The report was produced in close partnership with the African Development Bank, the Global Forum for Transparency and Exchange of Information for Tax Purposes, the African Union and the African Tax Administration Forum.
According to a statement on Thursday by the AfDB, the report provides comparable tax transparency statistics to aid decision-makers to address illicit fund flows.
“Thirty-four countries completed the survey for the 2021 edition, including six non-members of the Global Forum: Angola, Democratic Republic of Congo, Sierra Leone, Gambia, Zambia and Zimbabwe.
“The report noted progress on two core tax transparency pillars: political awareness and commitment, and capacity to advance tax transparency and the exchange of information,” AfDB explained.
The bank quoted the Head of the GF Secretariat, Zayda Manatta, as saying, “The GF and its partners will continue to support African countries to address outstanding issues and help them close the gap with other jurisdictions.”
AfDB stressed that fighting illicit transactions were at the heart of its partnership with the GF.
The Chief Governance Officer at AfDB, Carina Sugden, hinted that the issue received special focus in the bank’s recently approved Strategy for Economic Governance in Africa, which outlines the priorities for the AfDB’s governance work on the continent over the coming five years.
Her words, “Tax Transparency in Africa highlights the importance of international tax cooperation to combat corruption, tax evasion, money laundering, fraud, base erosion, profit shifting and illicit enrichment. The AfDB is committed to working with GF, the African Tax Administration Forum and other partners to tackle these issues.”
She added that the tax transparency agenda held significant implication for domestic resource mobilisation, the success of the Sustainable Development Goals, the African Union’s Agenda 2063 and the bank’s High Five priority areas.
Get real time update about this post categories directly on your device, subscribe now.