Africa’s Lost Tax Revenue, Lost Development Opportunities
- Tax Justice Network 2012
- 6p.
- Bulletin No 87 – FALL 2012 .
The article bemoans tax revenue losses in many African countries owing to a number of reasons. Tax policy plays a major role in shaping development outcomes. Much African-origin wealth has been accumulated in secret offshore companies, trusts, and bank accounts. The long-term outcomes in many countries have included low tax yields, requiring excessive reliance on external debt or foreign aid; under-investment in public goods such as health, education, training, and research; and widespread public disenchantment with the legitimacy of taxes and the state itself.Tax avoidance, particularly involving transfer pricing, undermines markets by distorting competition in favor of multinational companies extensively to shift their profits to tax havens. This in turn impacts the quality of governance in Africa. The majority of African people engaged in illicit financial flows to offshore secrecy jurisdictions come from the elite 1 percenT. Barriers to progressive taxregimes in Africa is explained in detail.
