Africa loses more to tax avoidance and evasion than it receives in international aid or foreign direct investment.
The Africa Progress Panel welcomes G20 action on tax avoidance and evasion, but urges 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 undervaluing exports in order to understate tax liability. 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 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.”
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 urges G20 leaders to include African nations in the discussions on global tax reform; to enforce transparency of company ownership; and to tackle transfer mispricing.
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Chaired by Kofi Annan, the former Secretary-General of the United Nations, the Africa Progress Panel (the Panel) includes distinguished individuals from the private and public sectors, who advocate on global issues of importance to Africa and the world.
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