Tax transparency and exchange of information (EOI) have a crucial role to play in helping African governments stem illicit financial flows (IFFs) and increase domestic revenue mobilisation, according to the Tax Transparency in Africa 2020, launched as part of the Africa Initiative
The report depicts the state of play for 32 African Union Member States, members of the Initiative and three non-members. It further shows the progress achieved on the two cornerstones of the Initiative on raising political awareness and commitment.
"The ongoing COVID-19 crisis will completely end any tolerance towards all forms of tax evasion,” said Maria José Garde, chair of the Global Forum on Transparency and Exchange of Information for Tax Purposes.
African countries’ EOI network has been expanding rapidly
It reached 3,262 bilateral relationships in 2019, compared to 685 in 2013. This is mainly due to the growing number of countries joining the Convention on Mutual Administrative Assistance in Tax Matters.
Encouraging evolutions were observed in the implementation of automatic exchange of information (AEOI). Ghana started exchanging in 2019, joining Mauritius, Seychelles and South Africa. Nigeria is expected to start in 2020 and Morocco in 2021. Assistance is ongoing with five countries to help them move towards the implementation of this standard. Interest in AEOI had been awakened by the remarkable outcomes of voluntary disclosure programmes launched prior to the first exchanges, with US$ 114.55bn recovered globally, including US$82mn in Nigeria and US$296mn in South Africa.
Expanding partnerships for tax transparency
Three additional African countries joined the Global Forum in the last year and six added their weight to the Yaoundé Declaration. Active partnerships with the African Union Commission, the African Development Bank, the African Tax Administration Forum, the Cercle de Réflexion et d'Échange des Dirigeants des Administrations Fiscales, the West African Tax Administration Forum and the World Bank Group significantly contributed to the fight against IFFs and have helped raise political advocacy across the continent.
Remaining challenges
According to Logan Wort, executive secretary of ATAF, “Now more than ever, the work on increasing transparency is important for Africa, and the collaborative efforts of ATAF and the Global Forum will ensure that African countries increase their exchanges of information while contributing to the fight against illicit financial flows.”
The Global Forum and its partners will continue to support African countries to address outstanding issues and help them close the gap with other jurisdictions.
