NAIROBI, Kenya, Dec 13–The Kenya Revenue Authority (KRA) Commissioner-General Githii Mburu has been appointed as the first Chairperson of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes Africa Initiative.
Africa Initiative is a continental program launched in 2014 by the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum), its African members, and various partners.
It aims at unpacking the benefits of tax transparency and exchange of information (EOI) to fight tax evasion and other illicit financial flows (IFFs) and serve African countries’ development.
Following a reorganization of the Africa Initiative Governance structure, Mburu has been appointed to provide leadership for a one year term.
His appointment was preceded by the member countries ratification of a proposal to extend the Africa Initiative operating term and mandate for a further three year period beyond December 2020.
Initially launched for a three-year period (2015-2017), the Initiative was renewed in Yaoundé, Cameroon in 2017 for another three years (2018-2020).
It has become the flagship program of the Global Forum which has inspired other continental programs across the world.
Through the Africa Initiative, the number of African countries involved in international work on tax transparency has grown. In 2009, only 4 African countries were members of the Global Forum.
Now, Africa is well represented with 32 African countries serving as members of the Global Forum.
All these advances contribute to the establishment of a culture of Exchange of Information that has helped generate additional tax revenues.
African jurisdictions now boast of an eightfold increase in the number of requests for information sent, which in turn, have yielded USD 189 million of additional revenue between 2014 and 2019.
On the Automatic Exchange of Information (AEOI) landscape, globally, around EUR 102 billion has been recovered through voluntary disclosure programs prior to the first automatic exchange of information, including EUR 27 billion for developing countries.
In Africa, Nigeria reported USD 82 million and South Africa USD 296 million.
Speaking when he addressed the Global Forum Virtual Plenary session on Friday evening, Mburu expressed his commitment to champion the adoption of robust tax evasion programmes across Africa.
“While the global community has moved to combat tax evasion and other forms of illicit financial flows (IFFs), the African continent has lagged. For this reason, I commit to actively champion efforts to unlock the potential of tax transparency and Exchange of Information for African countries,” Mburu said.
He explained that the Africa Initiative comprising of 32 African countries, 11 regional and international partners will strive to ensure that the member states are equipped to optimize the improvements in global tax transparency.
The Africa Initiative will also foster programs to tackle tax evasion and other forms of Illicit Financial Flows (IFFs); while mobilizing domestic resources to facilitate the achievement of the Sustainable Development Goals (SDG) as well as the African Union Commission’s Agenda 2063.
During the Plenary session, the delegates noted that the progress made in attaining the objective of the Africa Initiative is aptly captured in the Tax Transparency in Africa Report, which provides comparable statistics on this agenda annually.
The latest Tax Transparency in Africa Report, launched in June this year, shows significant progress on the two pillars of the Africa Initiative namely; raising political awareness (national support) and commitment in Africa, and developing capacities in African countries in tax transparency and EOI.
In the last year, three additional African countries (Guinea, Namibia and Mali) joined the Global Forum while six additional countries signed the Yaoundé Declaration, which now has 30 signatory countries in Africa.
This Declaration calls for an African tax transparency agenda to fight IFFs and enhance domestic resource mobilization.
The African Union Commission and the African Development Bank(AfDB) have joined the African Tax Administration Forum(ATAF) and other key partners in the Africa Initiative to promote the EOI agenda across the continent.
The number of African countries undertaking Automatic Exchange of Information (AEOI) has increased in the last couple of years with four jurisdictions already exchanging (Seychelles, South Africa, Mauritius and Ghana).
Nigeria is expected to start its first exchanges this year while technical assistance to facilitate commencement for Morocco and Kenya, which have committed to do AEOI by 2022 is now underway.
The Africa initiative will also provide support to 5 other African countries (Cameroon, Egypt, Senegal, Tunisia and Uganda) which are considering a practical date to commence their AEOI efforts.