African countries showed significant progress in 2019 exchanging information on illicit fund flows (IFFs) and achieving tax transparency according to a report produced by the Global Forum for Transparency and Exchange of Information for Tax Purposes, the African Union and the African Tax Administration Forum in partnership with the African Development Bank.

Tax Transparency in Africa 2020 also reports increased political awareness of and commitment to improve revenue capture in Africa and developing capacities in African countries in tax transparency and exchange of information.

Information exchange

Exchange of information networks of African countries expanded significantly to reach 3,262 bilateral relationships in 2019 compared to 2,523 in the previous year according to the report.

It says this is mainly due to three new African countries joining the existing 15 members of the Convention on Mutual Administrative Assistance in Tax Matters, which means eighteen African countries now use cross-border exchanged information in their tax investigations.

The number of exchange of information requests sent increased by 48 per cent between 2018 and 2019.

IFF estimates

The report notes that estimates of IFFs in the continent range between US$50-80 billion while 44 per cent of the continent’s wealth is thought to be held offshore, resulting in tax revenue losses of US$17 billion.

Countries covered in the report include 32 Global Forum member states and three non-members, Angola, Guinea Bissau and Malawi.

The annual publication of the Tax Transparency in Africa series is part of the various efforts of the continent to advance global tax transparency and exchange of information agenda in Africa in order to combat corruption, base erosion and profit shifting, tax evasion, money laundering, fraud and illicit enrichment.

The report, Tax Transparency in Africa 2020, can be found here.

Categories: Trade Based Financial crimes News

Tags: Africa, IFFs