West African Tax Institutes Move to Check Illicit Financial Flows

Tax institutes in West Africa, including the Federal Inland Revenue Service (FIRS) are evolving new strategies to check revenue leakages occasioned by humongous illicit financial flows out of the region.

Converging on Abuja under the auspices of West African Union of Tax Institutes’ (WAUTI) 5th annual international conference, the sub-region’s eggheads on tax matters and revenue are brainstorming on how to boost domestic resource mobilisation in the face of global fall in commodity prices and an almost non-existent donor support.

With the conference theme: “Relevance of Base Erosion and Profit Shifting (BEPS) to the Illicit Flow of Funds from Africa,” the WAUTI President, Dr. Teju Somorin said the theme was distilled from the activities of multinational corporations with subsidiaries in different jurisdictions.

“These activities which hitherto were not being critically viewed have resulted in capital flight, huge losses in tax revenue, and an unwholesome trend fast gaining grounds in the region.

“In view of the grave dangers this poses, we considered it worthwhile to make the subject the theme of this year’s confer- ence with a view to sounding a wake up call for those who are still asleep,” Somori said in her opening address at the conference.

In the same vein, the Chairperson, West African Tax Administration Forum (WATAF) and Commissioner-General, Liberian Revenue Authority, Mrs. Elfreida Steward Thamba, said the global focus is on domestic resource mobilisation as donor support dries up.

The renew focus, she noted, was a cogent component of the Sustainable Development Goals (SDGs).

According to her, there was a need to collectively address the issues of illicit financial flows from West Africa in particular, and Africa in general.

“Together, we must strive to comprehensively address these issues and influence through our advocacy and in our space and time, greater technical capacity building, the adoption of internal and regional policies to tackle and mitigate these ills in order to help ensure a better future for the unborn West African for the national good of our respective Countries and region as a whole.

“This must include our own self-assessment and commitment to strengthening ethics and state cards that is one of the core objectives of the union (WAUTI), also improving truth-

ful voluntary compliance and smart enforcement strategies,” she said. Thamba lamented that the lack of policy coherence, generally limited prioritisation of tax administration and the very deliberate actions of some multi-national companies investing in the region, were critical underpins of the alarming impact of base erosion, profit shifting and illicit flows from the region.

She cited the Global Financial Integrity report which said that a total of $530 billion was estimated to have been siphoned from Africa between 2003 and 2012 by multinationals bent on engaging in illicit flow of funds including tax evasion and other illegal activities.

Thamba described the loss rate as tragically alarming, adding that addressing the effects of these ills was exceedingly critical.