On 26 May 2021 the OECD published Tax Transparency in Africa 2021. The 2021 edition indicates that there has been progress in African countries on development of capacities in tax transparency and exchange of information (EOI); and progress in raising political commitment for these objectives.
Yaoundé Declaration
The African Union Commission has joined the Yaoundé Declaration, calling for action on tackling illicit financial flows through international tax cooperation. The Declaration aims to strengthen the participation of African countries in international efforts to combat tax evasion through transparency and exchange of information. International cooperation can help to restrict illicit financial flows (IFFs) and increase domestic resource mobilisation (DRM).
EOI networks
There are varying levels of progress in the use of tax transparency and EOI by African countries, with some members of the Global Forum at an advanced stage of implementation of the standards while others, especially new members, are still laying the foundation.
The EOI networks of African countries expanded further during the year, reaching a total of 3,752 bilateral relationships in 2020, due mainly to the growing number of African countries joining the Convention on Mutual Administrative Assistance in Tax Matters.
Additional tax revenue has resulted from the increase in requests for exchange of information. Since 2009, EOI has brought in more than EUR 1.2 billion of additional revenues (in the form of tax, interest and penalties) for African countries through offshore tax investigations including EOI on request and from the voluntary disclosure programmes launched before the implementation of the AEOI standard.
Exchange of information on request
Effective international tax co-operation depends on the implementation of international standards. The Global Forum has been conducting the second round of peer reviews for the exchange of information on request, reporting on six African countries. Mauritius has been rated as “Compliant”; Tunisia as “Largely Compliant” and Botswana, Ghana, Liberia and Seychelles as “Partially Compliant”.
The main issues involved in giving the “Partially Compliant” rating related to the availability of information on legal and beneficial ownership; accounting information; and the organisation and procedures to ensure a timely exchange of information. Technical support is available from the Global Forum and its international partners to help close the identified gaps and deficiencies in the procedures.
Automatic exchange of information
The implementation of automatic exchange of information is also progressing. Nigeria started to exchange in 2020, and Ghana, Mauritius, Seychelles and South Africa were already involved in automatic exchange of information. Morocco and Kenya have committed to begin their first exchanges in 2022.
