Africa loses over $50 billion annually in tax evasion, says Tax Justice Network-Africa

Alvin Mosioma (L), Executive Director of TJN-A. Jean Mballamballa (R) board member at TJN-A.

Alvin Mosioma (L), Executive Director of TJN-A. Jean Mballamballa (R) board member at TJN-A.

“There are loopholes that exist in revenue collection and if addressed would greatly improve domestic revenue which could be channeled to improve the quality of life in our countries. One such loophole is the Illicit Financial Flows that is bleeding the continent dry,” Alvin Musioma, The Executive Director of Tax Justice Network-Africa (TJN-A), a taxation watchdog

Musioma was opening the 5-day International Tax Justice Academy (ITJA) in Machackos, Kenya.

The five day training that began Monday offers training that aims to bridge the gap while empowering citizens from across Africa and beyond with knowledge on taxation.

The training comes at a time when the world is renegotiating the Post-2015 development agenda and exploring new ways of financing it and Africa is at the centre of these negotiations.

Under the theme “Financing Africa’s Economic development :Where is the money?” The Training is expected to have a positive impact on the delegates in their work and will inform potential or other interested parties as they embark on tax in their various fields.

According to Tax Justice Network-Africa, and a report by Former South African leader, Thabo Mbeki-chaired High Level Panel on Illicit Financial Flows,Africa loses more than $50 billion each year in Illicit Financial Flows (IFFs).

Over the last 50 years, Africa is estimated to have lost in excess of US$1 trillion through IFFs alone. This sum is roughly equivalent to all of the Official Direct Assistance (ODA) African countries received during the same period.

Africa is thus a net creditor to the rest of the world. These losses in real terms mean loss of jobs, income, basic services such as health and education and other essential infrastructure to structurally transform economies on the continent.

“As Africans, we can no longer let others drive our development agenda. We need to take ownership, and we can only do this if we finance it ourselves internally,” Musioma added.

In January this year, African leaders adopted the African Union/Economic Commission for Africa High Level Panel on Illicit Financial Flows from Africa report and a “special declaration”.

Significantly, the report represents the first African initiative of its kind to tackle the menace that is impeding Africa’s development.

The report goes ahead to state that, for this to have an impact, the continent needs to curtail IFFs and transform the funds recovered into a powerful tool for enhancing domestic resource mobilisation to spur the continent’s development.

The ongoing global economic uncertainties arising from the 2008 financial crisis and consequent austerity measures in rich countries, has elevated the discourse around domestic resource mobilisation in Africa, especially on taxation to fund African economies.

TJN-A stresses tax is the most reliable and sustainable source of financing development particularly for poor developing countries.

The taxation watchdog maintains tax is the glue that binds society together as it establishes the social contract between the state and its citizens.

It underscores taxation is also key to the establishment of the framework for good governance and accountability which are the foundations of a functioning democracy. And that without dependence on tax revenue, nation-states are caught in a cycle of perpetual dependency on external funding and this undermines the ability of citizens to hold their governments accountable.

“My expectations are that by the end of the training, I would be empowered enough and with the knowledge I can help my people back at home to make informed decisions on matters that touch on taxes.” says Prime Nkezumukama,National Programmes Coordinator Centre for support to local development Assistance to vulnerable persons in Burundi.