Africa ramps up efforts to retrieve wealth hidden across borders

TAX administrations across the African continent are ramping up efforts to build their capacity to identify and retrieve wealth hidden across their borders.

According to the African Tax Administration Forum (ATAF), in 2021 alone, information on assets of nearly €11 trillion held outside the taxpayers’ place of residence was automatically exchanged through the Standard for Automatic Exchange of Financial Account Information system, which collects information on the financial account holders in a country.

The system then shares details such as the name, address, taxpayer identification number, account information, and account balance, with the tax administration of the account holder’s jurisdiction of residence.

“Tax administrations now have proof of what was long suspected: tax evaders hide their wealth abroad in significant quantities,” said ATAF manager for international tax, Thulani Shongwe in a statement shared with the media.

In the last 10 years, tax administrations have collected over €114 billion in tax, interest and penalties through voluntary disclosure programmes and other tax compliance initiatives, said the regional tax body.

It noted that more African countries will be implementing this Standard in the coming years. Ghana, Mauritius, Nigeria, South Africa, Seychelles, have already implemented the Standard; Kenya, Rwanda, Tunisia and Uganda are already making advanced preparations to do so.

“As a result, they will be able to receive this same kind of information – finding out precisely who, where and how much is being concealed abroad,” said Shongwe.

“This is a priority action for several ATAF members.”

ATAF, working with the Global Forum on Tax Transparency and Exchange of Information for Tax Purposes, is supporting tax authorities by building knowledge on the legal and practical elements of successfully engaging in cross-border tax collection and asset recovery assistance.

A workshop on cross border assistance in the recovery of tax claims, hosted by the Ugandan Revenue Authority, will be held on 27 – 29 March 2023, in Kampala, Uganda.

“These efforts are powerful tools for improving revenue collection and building stronger state institutions. And they are key to tackling illicit financial flows – which remains an urgent priority for all, especially Africa,” said Shongwe.-businessweekly