A lack of transparency facilitates all types of illicit financial flows (IFFs) in Africa, including money laundering and terrorism financing, corruption as well as tax evasion according to a new report published by the Global Forum on Transparency and Exchange of Information for Tax Purposes.
Tax Transparency in Africa 2022 examines the progress and plans made by African countries to achieve the standard on exchange of information on request (EOIR) and the standard on automatic exchange of financial account information (AEOI) set by the Global Forum.
The report also examines progress in the capacity building programmes that are supported by the forum and considered prerequisite for countries to achieve the two standards.
Standard requirements
The standard on EOIR requires the transparency of banking and accounting records as well as ownership of entities and legal arrangements as well as a framework for obtaining information on request between tax authorities.
The standard on AEOI allows for the automatic annual exchange of information on offshore financial accounts.
African progress
Since 2014, EOIR alone has enabled nine African countries to identity over US$244 million in additional revenue according to the report.
Countries that have started AEOI include Ghana, Mauritius, Nigeria, Seychelles and South Africa who all exchanged information in 2021. Kenya and Morocco are committed to start their first exchanges in 2022 while Uganda and Rwanda have committed to start in 2023 and 2024 respectively.
Forum structure
The Global Forum is a group of over 160 jurisdictions that includes all G20 countries and financial centres.
Working under the auspices of the OECD and G20, the majority of its members are developing countries.
The Global Forum on Transparency and Exchange of Information for Tax Purposes report, Tax Transparency in Africa 2022 can be found here.
Categories: Trade Based Financial crimes News
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