The Global Forum on Transparency and Exchange of Information for Tax Purposes (the link is external), the African Union Commission and the African Tax Administration Forum have co-produced, with the support of the African Development Bank (AfDB), the 2023 Fiscal Transparency in Africa progress report. Published on July 7 at the 13th meeting of the Africa Initiative, in Cape Town, South Africa, this document reveals that African countries have generated additional revenues of nearly 1.7 billion euros

African countries have generated 1.69 billion euros in additional revenue through voluntary disclosures, the implementation of information exchange mechanisms, and rigorous investigations into extraterritorial activities related to tax evasion and illicit financial flows. That is what the report reveals. From 2009 to 2022, these measures effectively boosted tax revenue, interest, and penalties, highlighting substantial progress in tax transparency across the continent. The report, co-produced by the Global Forum on Transparency and Exchange of Information for Tax Purposes (the link is external), the African Union Commission, and the African Tax Administration Forum, with the support of the African Development Bank, presents the progress made by 38 African countries in combating tax evasion and other illicit financial flows through transparency and the exchange of information. Five third countries participated in the study.

In his opening address, South African Finance Minister Enoch Godongwana welcomed the Africa Initiative. “Over the past eight years, the Africa Initiative has changed the tax transparency landscape in Africa and contributed to the mobilization of more than 300 million euros in domestic resources,” he said. Stressing the importance of political will in efforts to increase tax transparency, however, Mr. Godongwana said that more could be done. He called for the Africa Initiative to strengthen the capacity of African countries to take advantage of intelligence exchange standards and protocols.

Zayda Manatta, Head of the World Forum Secretariat, presented the report to participants.

Highlights of the report include:

For the first time, an African country has reported that it has collected additional taxes - worth 10.6 million euros - through the use of the Common Reporting Standard.

The Republic of Congo, Angola, Zimbabwe, and Sierra Leone have joined the World Forum as the 165th, 166th, 167th, and 168th members (the link is external) since June 2022.

Twenty-three African countries are now party to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, the most comprehensive instrument for all forms of cooperation to combat tax evasion, significantly expanding their information-sharing networks.

Ten African countries have committed to automatic exchange of financial account information (the link is external) on a specific date and more are expected to do so in the near future, with the assistance of the Global Forum and its partners.

In 2022, 1170 officials from 37 African countries were trained on the effective use of automatic exchange of financial account information tools (the link is external). In addition, 1,800 officials were trained by local trainers who had participated in the training of trainers programme (the link is external).

In her presentation, Ms. Manatta cited a World Bank study that projected that participation in information-sharing mechanisms could increase tax revenues in African countries by 5% to 19% of gross domestic product (GDP).

“The more countries become familiar with this tool, the more they use it, the more tax revenue should be. And if you can monitor the correlation between revenue collection and information sharing, we will be able to better demonstrate the benefits countries are getting from this tool,” she said

South African Revenue Service (SARS) Commissioner Edward Kieswetter, also co-chair of the Africa Initiative, said collaboration was key to achieving “our” shared ambition to effectively mobilize resources. “A tax risk somewhere is a tax risk everywhere. Tax administrations are called upon to serve a transformative and superior purpose in the interests of society,” said Mr. Kieswetter

Representatives of two new African members of the World Forum, Zimbabwe and Angola, attended the meeting. The event was also marked by the release of a new toolkit to help tax administrations implement and take advantage of initiatives such as the Global Forum.

The release of this report comes as African governments continue to step up efforts to strengthen domestic resource mobilization in the face of economic headwinds, including global inflation and rising debt levels. The Organization for Economic Cooperation and Development (OECD) estimates that Africa loses up to $60 billion every year in illicit financial flows.