Zimbabwe’s Rich Fuel Inequality Through Illicit Financial Flows
- Harare Inter Press News Agency 2014.
The article reports on the rich being the main fuellers of illicit financial flows through citing official figures and statistics from various researches and studies conducted.The major findings are that Zimbabwe has lost 12 billion dollars in illicit financial flows over the last three decades and experts say this illegal practice is perpetuating social inequalities and poverty in Zimbabwe.The demand for the cash transfers is more in depth in urban areas. “Illicit financial inflows cause inequalities because the government loses revenue that should in turn be redistributed to the poor through the trickle-down effect. Zimbabwe has been affected by illicit financial flows, as money is illegally transferred or utilised elsewhere usually through criminal activities, corruption, tax evasion, bribes and cross-border smuggling. The illicit financial flows occurred mostly through under-invoicing by multinational companies and weak legal and institutional frameworks. “Illicit financial flows perpetuate inequality because they are fuelled by rich multinational corporations and rich individuals who have the capacity to do tax planning resulting in transfer mis-pricing and trade mis-invoicing.
