African countries lethargic to information on illicit financial outflow – Monica Bhatia

Illicit financial outflows
Illicit financial outflows

Although there is information on illicit financial outflows across the world, Africa seems lethargic in accessing such information to beef up tax compliance and revenue mobilization, Monica Bhatia, Global head of the Global Forum Secretariat on Transparency and Exchange of Information for Tax Purposes, said here on Wednesday.

Speaking on the sides of the two-day Fifth Africa Initiative Meeting on tax transparency, Bhatia told the media that African countries were not taking advantage of available information to understand the behavior of their tax payers.

“Africa has to ask for the information. There hasn’t been that much asking for information as being done by other countries so part of our effort is to encourage tax administrations to be able to ask for information,” Bhati explained.

Although most of the member-countries were cooperating, the challenge, according to the official, was that African countries needed to ask for that information.

“Some are asking but some are not asking. As you are aware, more money flows out of developing countries, including Africa, than comes through aid so that significantly hampers the ability of governments to provide basic services to its citizens; to have the revenue needed and to be able to have less reliance on external aid,” Bhati pointed out.

Countries need to raise their own revenue from their own tax payers. So the fight against tax evasion is intended to help countries raise their own revenues for their own countries and their own citizens, added the official.

A report by the High Level Panel on Illicit Financial Flows from Africa chaired by former South African President Thabo Mbeki estimated Africa could be losing as much as 50 billion dollars per annum through illicit financial flows.

Between 2000 and 2008 alone, the report said Africa had lost 252 billion dollars to the phenomenon.

Opening the conference, Kwaku Kwarteng, Ghana’s Deputy Minister for Finance, underscored the need for Ghana for instance to plug all tax leakages in the quest to develop beyond aid.

”Ghana has indicated unflinching support for tax transparency and exchange of information; we have set an agenda to push Ghana Beyond Aid. At the core of this agenda is to improve domestic revenue generation to fund government’s projects and programs

“We are therefore determined to block all avenues that provide opportunities for tax evasion and illicit financial flows,” Kwarteng stressed. Enditem

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