African Countries Making Positive Progress On Tax Transparency

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The report covers 38 African countries and is a co-production of the Global Forum on Transparency and Exchange of Information for Tax Purposes, the African Union Commission and the African Tax Administration Forum. It measures the impact of the Africa Initiative’s work and details capacity-building activities carried out by the Global Forum and its partners in 2021.

Major achievements in recent years include:

  • 22 African countries are now parties to the multilateral Convention on Mutual Administrative Assistance in Tax Matters, the most comprehensive instrument for all forms of  co-operation to tackle tax evasion, thus considerably expanding their EOI relationships networks (4 135 bilateral relationships in 2021, compared to 913 in 2014).
  • Effective infrastructures for information exchange are being set up, with the majority of countries establishing well-functioning competent authority units within their tax administrations. As a result, the number of countries sending requests for information is increasing (15 in 2021, from 6 in 2014), and the total number of requests sent is growing steadily (+26% in 2021, compared to 2020).
  • 10 African countries have committed to automatic exchange of financial account information (AEOI) by a specific date.
  • 9 African countries collectively reported collecting over EUR 233 million as a direct result of exchange of information on request (EOIR) since 2014. In all, at least EUR 1.2 billion additional revenue (tax, interest and penalties) have been identified in the region since 2009, through voluntary disclosure programmes launched prior to the first automatic exchanges, EOI and offshore investigations.
  • A record of 1 500 African tax officials have been trained to build capacity on the use of EOI instruments in 2021.

New political engagements further reinforced the multilateral efforts to advance tax transparency in 2021: Algeria joined the Global Forum – becoming the 33rd Africa Initiative member – and signed the Yaoundé Declaration. Rwanda also added its voice to this important initiative, which now counts 34 signatories.

“I wish to applaud the members of the Africa Initiative for their commitment and resilience in implementing tax transparency standards during the difficult times occasioned by the COVID-19 pandemic,” said Githii Mburu, Commissioner General of the Kenya Revenue Authority and Chair of the Africa Initiative. “The Tax Transparency in Africa 2022 report is an enlightening testament to the valuable gains made in the fight against tax evasion and illicit financial flows through consistent utilisation of EOI networks and tools.”

While showing swift and positive developments, the report points out uneven progress across the region. Four countries alone accounted for 92% of all requests sent by African countries in 2021; and four from the six countries assessed in the second round of EOIR peer reviews so far were rated partially compliant, showing common difficulties in the implementation of the EOIR standard, which includes advanced beneficial ownership requirements.

“The Global Forum will pursue and intensify its efforts to actively promote the transparency agenda in Africa,” said Zayda Manatta, Head of the Global Forum Secretariat. “We look forward to helping further develop local capacities, for example through our Train the Trainer programme, to achieve more transparent tax systems for the benefit of all African countries and their citizens.”

Launched in 2014, the Africa Initiative seeks to ensure that African countries are equipped to exploit the latest advances in global transparency, to better fight tax evasion and other IFFs and ultimately improve resource mobilisation to sustain their development.

The Kenya Revenue Authority is hosting the 11th meeting of the Africa Initiative from 14 to 16 June 2022 in Nairobi, Kenya. The event will gather high-level representatives and experts from African tax administrations, regional and international organisations, as well as academia and civil society organisations.