07/07/23

AFRICA: Africa focuses on Tax Transparency to counter tax evasion and illicit financial flows

As published on: sars.gov.za, Friday 7 July, 2023.

New African voices help amplify international efforts for tax transparency

Cape Town, Thursday 6 July 2023 – The South African Revenue Service is hosting the 13^th Meeting of the Africa Initiative over two days, bringing together Commissioners-General of revenue authorities across Africa, high-ranking representatives, experts, as well as regional and international organisations and civil society.

The meeting was officially opened by the Minister of Finance of South Africa, Mr Enoch Godongwana who emphasised the importance of tax transparency tools in the armour of tax administrations to counter tax non-compliance: “The international tax transparency standards have proven to be an effective tool in curbing tax evasion and other IFFs and generating additional revenue ready to be invested in the development and provision of public services.” He urged the Global Forum to “continue to serve African countries and to support the Africa Initiative in its efforts to build and enhance their capacities to use the Exchange of Information standards at their full potential on the continent.” 

“A tax risk anywhere, is a tax risk everywhere. Tax administrations are called to serve a transformative and higher purpose in the interest of the African continent specifically. Collaboration is essential if we are to serve our shared ambition for effective resource mobilisation to fight poverty, unemployment and inequality,” said Edward Kieswetter, Commissioner of the South African Revenue Service (SARS) and Co-Chair of the Africa Initiative.

“We remain steadfast in our commitment to help African countries address all challenges in implementing and benefitting from the tax transparency standards. For together, we can achieve more,” said Philippe Kokou B. Tchodie, Commissioner General of the Togolese Revenue Office (OTR) and Co-Chair of the Africa Initiative.

“Our most recent programmes, Train the Trainer and Women Leaders in tax Transparency, are showing very positive results in Africa and we will pursue and amplify our efforts to help promote tax transparency for the benefit of all African countries and their citizens,” said Zayda Manatta, Head of the Global Forum Secretariat.

The meeting coincided with the launch today of the Tax Transparency in Africa 2023 which presents African countries’ latest advances in tackling major issues of tax evasion and other illicit financial flows (IFFs) through the increased use of tax transparency and exchange of information (EOI) for tax purposes, as well as the Global Forum’s toolkit on cross-border assistance recovery of tax claims.

The 2023 report covers 38 African countries. It showcases the very positive impact of the Africa Initiative’s endeavours on the continued enhancement of tax administrations and their revenue collection. It also details capacity building activities carried out by the Global Forum and its partners in Africa throughout 2022 and proposes practical strategies for further progress.

Notable achievements in recent years include:

• African countries collectively reported collecting over EUR 310 million as a direct result of exchange of information on request (EOIR) since 2014, and at least EUR 1.69 billion additional revenues (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 investigations of offshore income and assets. For the first time, one African country reported collecting additional taxes (EUR 10.6 million in 2022) through the use of CRS data.

• 23 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 non-compliance, thus substantially expanding their EOI relationships networks.

• To date, 10 African countries have committed to automatic exchange of financial account information(AEOI) by a specific date and more are expected to do so in the near future, with the assistance of the Global Forum and its partners.

• 15 training events were organised in 2022 and delivered to 1 170 officials representing 37 African countries. Further, more than 1 800 additional officials were trained on EOI by local trainers who had participated in the Train the Trainer programme.

• 4 African countries (Republic of the Congo, Angola, Zimbabwe and Sierra Leone) have joined the Global Forum as the 165^th, 166^th, 167^th and 168^th members since June 2022, further demonstrating the acute political attention to the international tax transparency agenda.

Launched in 2014 and now supported by sixteen donors and development partners, the Africa Initiative seeks to ensure that African countries are equipped to participate in and exploit the advances on global transparency, to better fight tax evasion and other Illicit Financial Flows and ultimately improve resource mobilisation to sustain their development.

The Global Forum is the leading multilateral body mandated to ensure that jurisdictions around the world adhere to – and effectively implement – both the exchange of information on request standard and the standard of automatic exchange of information. These objectives are achieved through a robust monitoring and peer review process. The Global Forum also runs an extensive capacity-building programme to support its members in implementing the standards and help tax authorities make the best use of cross-border information-sharing channels.

Tags

Africa Tax Transparency Tax Evasion Tax Avoidance