AFRICAN COUNTRIES LOSING $88bn
...from illicit financial flows
AFRICAN countries, including Zambia are losing over US$88 billion annually through Illicit Financial Flows (IFFs), a trend which can be curbed by sealing domestic tax loopholes that facilitate aggressive tax avoidance and evasion.
IFFs can also be curbed through an informed and proactive legislature which facilitate aggressive tax avoidance and evasion.
This is according to the Tax Justice Network Africa Executive Director, Alvin Mosioma, at the 2022 annual continental conference of the African Parliamentary Network on IFFs and taxation (APNIFFT) in Lusaka.
The conference is being convened by Tax Justice Network Africa ( TJNA) in partnership with the Africa Tax Administration Forum (ATAF) alongside several co-conveners, and the Centre for Trade Policy and Development.
“The scourge of illicit financial flows that is denying
African countries billions of dollars annually can only be curbed through an informed and proactive legislature that is sealing domestic tax loopholes that facilitate aggressive tax avoidance and evasion,” Mr Mosioma said.
He stated that Members of Parliament under APNIFFT were tasked with the responsibility of ensuring that through legislative reforms governments are maximising opportunities for domestic revenue collection,
Mr Mosioma also stated that the Parliamentarians were also tasked to ensure that the revenues were equitably allocated and efficiently spent to guarantee citizens access to social amenities and economic opportunities and curb inequality.
APNIFFT, he pointed out, had emerged as a unique platform that was driving legislative tax reforms across Africa.
On the conference, Mr Mosioma said it came at a time when the continent was emerging out of probably the worst economic crisis that was eroding the gains made over the last decade.
He said the multiple crisis resulting out of the Covid-19, climate crisis, debt distress and the war in Ukraine would see an additional 20 million of Africans fall into extreme poverty.
“The unbearable burden of debt servicing in 2022 alone is estimated to cost African countries US$64bn, almost twice the bilateral aid the region is receiving.
“The role of Parliamentarians in this context cannot be overstated. The hopes and aspiration of citizens to lead a dignified life devoid of poverty and misery rest on their representatives,” Mr Mosioma said.
At the same function, Open Society Foundation Executive Director, Titus Gwemende stressed the need for African countries to promote domestic and regional tax transparency measures to identify and curb IFFs.
“We should ensure public registers of beneficial owners of legal entities and arrangements automatic exchange of information Scale-up multilateral cooperation in combating illicit financial flows (including tax evasion and corporate tax abuse).
“We need to ensure that multinational corporations pay their share of taxes where they do business by rethinking and reinforcing the reform of the global corporate tax system and supporting the establishment of a global tax body to establish global norms on tax rules,” Mr Gwemende said.