G20 Tax Reform Must Benefit Africa Too –Africa Progress Panel

G20.jpg

The Africa Progress Panel has welcomed the G20 action on tax avoidance and evasion, but has urged G20 leaders meeting in Russia this week to ensure that international tax reforms benefit Africa too.

In Africa, tax avoidance and evasion cost billions of dollars every year. One single technique – transfer mispricing – costs the continent more than it receives in either international aid or foreign direct investment.

Transfer mispricing includes the undervaluation of exports to understate tax liability.

In this way, Africa loses precious opportunities to invest in health, education, energy, and infrastructure.

Kofi Annan, former UN Secretary-General and Chair of the Africa Progress Panel (link) said: “Accepted for too long, tax avoidance has reached a level that is completely unconscionable today. Our international tax system is broken and in need of reform.”

“Those G20 countries, which host multinational companies, must take responsibility for tax avoidance and evasion,” he added.

Strive Masiyiwa, Founder of Econet Wireless, and Member of the Africa Progress Panel said: “If countries such as the US or UK can struggle with tax avoidance issues, then you can imagine how difficult this is for somewhere like the Democratic Republic of the Congo. Fair taxation will help Africa to invest in health, education, energy, and infrastructure, creating jobs and opportunities for its growing population.”

Linah Mohohlo, Governor of the Bank of Botswana, and Member of the Africa Progress Panel, said: “Africa has a dire need for infrastructure investment, which is one of the better ways to spurring sustainable economic growth; tax avoidance and evasion remain the critical barriers to achieving this lofty ideal. The G20 tax reform initiative is, therefore, most welcome and timely.”

The Africa Progress Panel urged G20 leaders to include African nations in the discussions on global tax reform; to enforce transparency of company ownership; and to tackle transfer mispricing.

Chaired by Kofi Annan, former Secretary-General of the United Nations, the ten-member Africa Progress Panel advocates at the highest levels for equitable and sustainable development in Africa.

Every May, the Panel releases its flagship publication, the Africa Progress Report. This year’s report – Equity in Extractives: Stewarding Africa’s natural resources for all – covered Africa’s oil, gas, and mining sectors (link).

Source: The Africa Progress Panel

Share News

submit to reddit