A report shows that multi-national companies are fleecing African countries of billions by finding ways to flout local tax laws.
In reports about African countries hemorrhaging much needed revenue from industries, corruption is usually named as the culprit. However, a report from Swedish international development agency Forum Syd says that the tax evasion of multi-national corporations operating on the continent does more to cheat Africa of its wealth than corrupt leaders do.
According to the report, Bringing the Billions Back, if reported, the money wrongfully leaving African countries would generate an additional $160 billion in tax revenue. A sum equaling more than one and a half times the total aid sent to the developing world over the course of one year. Instead, the money lands in rich Western nations or protected in tax havens.
According to Al Jazeera, part of the difficulty in snagging the lost revenue is the lack of strong legal and bureaucratic infrastructure to hold corporations accountable.
The rampant flouting of tax laws, however, leaves many countries perpetually struggling to get ahead by undermining trade, crippling competition, worsening income gaps and draining hard-currency reserves.
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(Photo: REUTERS/Howard Burditt HB/AA)