Indications are that African countries may have lost over $1.4trillion to illicit financial flows (IFFs) in the last three decades.
Making this disclosure recently was Logan Wort, Executive Secretary, African Tax Administration Forum (ATAF). He spoke with our correspondent in Johannesburg, South Africa, during a week-long media engagement workshop and training for journalists drawn from 21 African countries.
Citing a report by the African Union and Economic Commission for Africa, Wort said most of the money that gets lost in African countries is due to a mix of those factors.
Paired into specifics, Wort said about $50 billion to US$80 billion annually is lost annually.
Specifically, he said, corruption by government officials that includes theft, bribery and other forms of abuse, contributes 5% of total losses.
Besides, he said, criminal activities including drug trafficking, money laundering, racketeering, counterfeiting, human trafficking, illegal arms dealing, and smuggling of contraband, fraud in the financial sector constitute 30 % with the remaining 66% due largely to corporate behaviour and a big part of that is tax avoidance and tax evasion. Tax avoidance is bigger loss than tax evasion.
72 participants representing 20 revenue authorities and 41 news media agencies were represented at the maiden media engagement by ATAF.
ATAF believes that when citizens are better and adequately informed (through the media) they tend to become tax compliant which would ensure revenue growth to facilitate national development.
The engagement, among others, focused on how Africa is addressing priority tax issues at the local and international levels and how the media can positively impact the work of tax administrations.
Making her closing remarks Mary Baine, head of International Tax and Technical Assistance, she urged them to remain engaged and assured ATAF’s unending commitment to working with media and tax authorities in improving taxation on the continent.
ATAF was inspired by the deliberations at the “International Conference on Taxation, State Building and Capacity Development in Africa” held in Pretoria, South Africa from 28 – 29 August 2008. Commissioners, Senior Tax Administrators and Policy Makers from 28 African countries resolved to work towards the establishment of ATAF.
Headquartered in South Africa, ATAF was thus established in order to create a platform to promote and facilitate mutual cooperation among African Tax Administrations and other relevant and interested stakeholders with the aim of improving the efficiency of their tax legislation and administration.
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