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Tax evasion, illicit financial flows hinder
Africa’s revenue collection: experts

KIGALI, (Xinhua) -- Experts on Monday said that tax avoidance and illicit financial flows are hindering efforts of African governments to mobilize domestic resources, while calling for sustainable ways to boost revenue collection.

They were speaking at a high-level tax policy dialogue of the 2nd African Tax Administration Forum (ATAF) that opened on Monday in Rwandan capital Kigali.

“Taxes are key to financing development and increasing investment, however, tax evasion and illicit financial flows are becoming a challenge to domestic tax revenue collection among African economies,” said Logan Wort, executive secretary of ATAF.

African countries need to strengthen their domestic tax legislation and tax administration capacity if they are to address tax evasion and illicit financial flows, he said.

The Africa Union estimates that Africa loses 50 billion U.S. dollars a year in illicit financial flows that find their way to developed countries. 

Logan noted the level of African resources lost through illicit financial flows is higher than the official aid received by African countries.

According to him, ATAF has spearheaded the work of representing African tax administrations in the global tax organizations to ensure effectiveness in tax revenue collection.

According to Alvin Mosioma, executive director of Tax Justice Network-Africa, eliminating all illicit financial flows and fraudulent schemes aimed at avoiding tax payments requires extensive strengthening of tax legislation in both direct and indirect taxes.

African countries will need to work together and share best practices to achieve this highly ambitious goal, Mosioma added.

There is an urgent need for African countries to develop coherent tax policies that address tax evasion and avoidance while creating a more certain and transparent investment climate, said Doris Akol, commissioner general of Uganda Revenue Authority.

“We need to work together to develop strong legislations and systems that will enable revenue authorities and other implementing agencies to detect and deter entities involved in tax avoidance and illicit financial flows,” she said.

Rwandan finance minister Uzziel Ndagijimana said for Africa to achieve Sustainable Development Goals, a coordinated response to resolve taxation issues through robust domestic revenue mobilization is needed.

Under the African Union’s Agenda 2063, Africa is committed to strengthening domestic resource mobilization, building continental capital markets and financial institutions, and reversing the illicit flows of capital from the continent, he said. 



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