Illicit financial flows (IFFs) is one of the key contributing factors to lower tax revenues in developing countries. As most IFFs flows from African countries end up in financial institutions outside Africa, intergovernmental cooperation aiming at enhancing transparency and exchange of information (EOI) for tax purposes is a key ingredient of any solution to tackling international tax evasion. However, while the supply side of the EOI equation has improved over the years with over 70 jurisdictions having eliminated strict bank and ownership secrecy for EOI purposes, the African demand side of the equation remains problematic, with few African countries making requests and thus benefiting from the huge unexploited potential in the EOI tools and wide network. This policy brief proposes solutions whereby African countries could influence existing global standards on EOI and develop home-grown tax information sharing and transparency measures.
Task Force: Cooperation with Africa