Tax Evasion Crippling Africa
September 5, 2013 International Tax Cooperation
OXFORD – The G20 needs to make a greater effort to stop the inordinate levels of corporate tax evasion occurring in Africa.
The governments of sub-Saharan countries are losing out on more than USD 38.4 billion in tax revenues every year, due to the trade mispricing carried out by international businesses operating in the region, according to a statement issued on September 4th by the non-government orginazation Oxfam International.
Oxfam estimates that the loss in tax revenues is equivalent to approximately 2 percent of the GDP generated every year by all the countries of sub-Sahara, and is equivalent to more than half of all the money spent on healthcare by governments in the region.
As a comparison, Oxfam claimed that if the same if the same levels of trade mispricing occurred in the G20, the arising tax losses would be nearly USD 1.2 trillion.
Commenting on the extent of the tax evasion in Africa, the spokesperson for Oxfam Emma Seery said that “…the G20 should be ashamed to be at the helm of an economic system that allows companies to rip off Africa to this extent.”
To address the situation, Oxfam is calling for the G20 to make greater effort to combat tax evasion in Africa and other developing regions by supporting international agreements for automatic exchange of tax information, implementing public registers of beneficial ownership of companies, and by pushing for country-by-country reporting of profits of international businesses.
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