Africa moves to protect interests in global tax rules to increase revenues & stem illicit financial flows: AU

Addis Ababa, June 2, 2023 (FBC) – The African Union has concluded a three-day meeting of the Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration- Sub-Committee on Tax and Illicit Financial Flows under the theme “Tax in Africa: contemporary issues affecting the continent” and adopted recommendations that ensure African interests are protected in the design and implementation of the global tax rules, and ways to improve domestic resource mobilization for Africa’s development.

The meeting convened by the African Union Commission department of Economic Development, Tourism, Trade, Industry, Mining (ETTIM); and supported by the African Tax Administration Forum (ATAF),

Present at the meeting were Experts and Senior Officials from the Ministries of Finance, Tax Administrations, Government Specialised Agencies, Central Banks of the AU Member States, representatives from the Regional Economic Communities (RECs), African Tax Experts, Civil Society Organisations (CSOs), Non-Governmental Organizations (NGOs), Investigative Journalists, and Academia interrogated key issues on the tax regimes in Africa and made recommendations to guide  possible reviews and reforms of national tax policies to protect Member States’ tax bases.

The meeting discussed parameters of the African position on the Promotion of inclusive and effective tax cooperation at the United Nations and on the consideration of the enactment of a Domestic Minimum Top-up tax for tax base protection ahead of the incoming global tax rules.

It is also stated that the session adopted recommendations to use the VAT toolkit by ATAF for improved revenue collection on cross-border supplies.

According to AU official presser, the meeting identified areas where future legislative action or coordination would benefit Member States, the African Union and relevant partners, in regard to addressing the issue of wasteful tax incentives, stemming of Illicit Financial Flows respectively, and improving continental domestic resource mobilization necessary for the development of the continent.