Tax Evasion Robbing Africa of Billions

A report shows that multi-national companies are fleecing African countries of billions by finding ways to flout local tax laws.

Posted: 11/30/2012 03:21 PM EST
Tax Evasion Robbing Africa of Billions

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.

“There would be no need for debt, there would be no need for aid. We would be self-sufficient,” University of Nairobi tax law professor Attiyah Waris told Al Jazeera.

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.

BET Global News - Your source for Black news from around the world, including international politics, health and human rights, the latest celebrity news and more. Click here to subscribe to our newsletter. 

(Photo: REUTERS/Howard Burditt HB/AA)

Videos You May Like