The adoption of the report sent a clear signal that African leaders want to clamp down on tax avoidance. The report led by ex-South African president Thabo Mbeki outlined the need for national, regional and international action to address the problem. It is now up to the African finance ministers to create a clear plan to implement the recommendations promptly and to set up mechanisms to ensure that the money generated is spent on essential public services such as schools and hospitals.
ActionAid says that the plans must include four crucial elements to be effective:
- Legislation against harmful tax incentives must be adopted and implemented
- Harmful tax treaties must be renegotiated
- Clear and public country-by-country reporting by multinational companies enforced
- And an international tax body must be established to monitor and hold countries to account on their commitments
Henry Malumo, Regional Advocacy Coordinator for ActionAid International said;
“We recognise the great strides taken to adopt the report and the recommendations to stop tax dodging. Ministers must now agree and implement a plan to stop the continent from haemorrhaging money and to invest in essential public services to reduce poverty and inequality.
“The evidence is clear that African countries will not be able to provide the investment needed to end poverty and promote sustainable development until illicit financial flows, particularly the tax avoidance and evasion of multinational companies, are stopped.”
The African Union High Level Panel report concludes that while the issues are complex, ending illicit financial flows is a political issue that can be solved. But Africa cannot do this alone so international support for new policies and treaties is essential to fully implement the recommendations and to ensure development for Africa.
For more information or interviews with Henry Malumo in Addis Ababa contact:
Charlotte Armstrong on +44 (0) 7738 884014 or Charlotte.Armstrong@actionaid.org
Follow us on twitter for live reactions: @ActionAidNews, @HenryMalumo