AFRICA: African countries reap highest-ever fiscal benefits from tax transparency

Launched today at the 15th Meeting of the Africa Initiative in Lomé, Togo, Tax Transparency in Africa 2024: Africa Initiative Progress Report shows African countries collected more fiscal revenue through tax transparency, exchange of information and related measures in 2023 than over the 13 preceding years combined.

With EUR 2.2 billion of additional revenue reported by 7 African countries last year, the report makes a strong case for an ever-sharpening political attention on the matters of transparency and international tax co-operation. In total, since 2009, African countries have identified over EUR 3.8 billion in additional revenue as a result of the use of the exchange of information on request (EOIR), automatic exchange of financial account information (AEOI), and voluntary disclosure programmes (VDPs).

After 10 years of shared progress on advancing the implementation of EOIR and AEOI, the 39 members of the Africa Initiative are now harnessing the fruits of their sustained and collective efforts in the fight against tax evasion and other illicit financial flows, with domestic resource mobilisation (DRM) spin-off as a guiding light.

“The creation of the Africa Initiative was prompted by the need to make tax transparency a lever for increasing public resources in African countries”, said Philippe Kokou Tchodié, Commissioner General, Togolese Revenue Office, and Co–Chair of the Africa Initiative. “This can only be achieved through strong political support and, above all, capacity building that enables tax administrations to make effective use of international information exchange in the fight against international tax evasion and avoidance.”

Major breakthroughs include:

22 African countries have joined the Global Forum since 2014, including 5 since March 2023 (Angola, Democratic Republic of the Congo, Sierra Leone, Zambia and Zimbabwe).

Through the Convention on Mutual Administrative Assistance in Tax Matters (MAAC), African countries have entered into over 3400 EOI bilateral relationships to foster tax co-operation and most of them have an EOI network covering more than 140 jurisdictions.

12 African countries are committed to start automatically exchanging financial account information by 2026, and 5 have already started automatic exchanges.
8 out of 12 African countries fully reviewed in the second round of EOIR peer reviews were granted a satisfactory rating (“Compliant” or “Largely compliant”).

More than 2700 tax officials have been trained on the exchange of information by the Global Forum Secretariat between 2020 and 2023, including through the flagship programmes: Train the Trainer and Women Leaders in Tax Transparency.

“In addition to the standard setting, peer reviews and monitoring, the greatest value proposition of the Global Forum and its regional initiatives is its unwavering commitment to capacity building and outreach aimed at enhancing tax transparency across the globe,” said Edward Kieswetter, Commissioner, South Africa Revenue Authority, and Co–Chair of the Africa Initiative.

The launch of Tax Transparency in Africa 2024 is part of the 15th Meeting of the Africa Initiative, jointly organised by the Global Forum Secretariat, the Togolese Revenue Office (Office Togolais des Recettes (OTR)) and the Ministry of Economy and Finance of Togo, and to be held on 3-5 June 2024 in Lomé. The meeting will gather senior politicians, high-level representatives from more than 30 African countries, as well as international tax experts, various regional and international organisations, partners and donors of the Africa Initiative and civil society organisations.

“The results presented in the report are clear evidence that international co-operation in tax matters is a necessary instrument to fight tax evasion and other forms of illicit financial flows. African countries are reaping the outcomes of their investment in tax transparency for the benefit of their people,” said Zayda Manatta, Head of the Global Forum Secretariat. “The Global Forum Secretariat is proud of having walked at their side and is committed to continue supporting their efforts.”

Backed by 17 regional and international donors and partners, the Africa Initiative has helped create strong and sustainable regional synergies and heightened ambitions amongst African countries, to better tackle tax evasion and other illicit financial flows. The capacity-building activities of the Global Forum and its partners ultimately support African countries’ revenue mobilisation efforts. This crucial work takes place against a backdrop of inter- and intra-regional discussions around fairness of the tax systems, mechanisms and benefits of advanced levels of international co-operation in tax matters, and the need to mobilise domestic resources to reach the Sustainable Development Goals (SDGs).

With 171 members, the Global Forum on Transparency and Exchange of Information for Tax Purposes is the leading multilateral body mandated to ensure that jurisdictions around the world adhere to, and effectively implement the standards of transparency exchange of information on request (EOIR) and automatic exchange of financial account information (AEOI). These objectives are achieved through a robust monitoring and peer review process. The Global Forum also runs an extensive capacity-building programme to support its members in implementing the standards and help tax authorities make the best use of cross-border information-sharing channels.