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African Countries Clearly Benefit from Tax Transparency Efforts

22nd June 2022

TP in 5 social images african countires

Tax transparency” may seem like just another industry buzz phrase, but here’s the thing: The premise works. In fact, according to an OECD report released last week, since 2014, African countries have gained an additional $244 million in revenue due to an increase in information sharing. The problem? They lose $50 billion to $88.6 billion each year due to illicit financial flows, so there’s still a lot to recoup.  

As the data proves, an exchange of information can help African countries increase tax revenue, however many African countries don’t have the resources needed to do it. Or, they may not have treaties in place with other countries that would allow them to obtain the information.  

But they are trying: The report shows that requests for information increased by 26% in 2021 from 2020 and the number of countries requesting information rose from 13 to 15. But four countries made up 92% of the requests. African countries could do better—if other countries stepped in to help, according to the Tax Justice Network. The process for data exchanges needs to be simplified, so that more countries can benefit from the exchange of information. Still, when it comes to tax transparency, African countries are headed in the right direction—that much is clear.