Home / BUSINESS / Ghana named one of 5 African net senders of tax information

Ghana named one of 5 African net senders of tax information

Ghana has been listed as one of only five African countries from 32 to be recognized as net senders of Exchange of Information on Request Standard (EOI) for tax purposes, the others being Burkina Faso, Cameroon, Lesotho and Uganda.

This implies that the country has largely been compliant in the operationalization of information sharing on request that enables receiving countries get the needed information for effectively dealing with tax evasion, illicit financial flows among others.

However, most African countries are still behind their potential of EOI and more efforts need to be put into the operationalisation of EOI, a recent report on Tax Transparency in Africa released by the Global Forum on Transparency and Exchange of Information for Tax Purposes asserts.

The ultimate objective of tax transparency and information sharing is to assist tax administrations to fight against cross-border tax evasion and avoidance as well as increasing Domestic Resource Mobilisation.

Regarding EOI, member countries send requests to treaty partners to clarify the position of cross-border transactions and assets held offshore by its taxpayers. African countries participating in the Africa Initiative have committed to increase the number of EOI requests sent and monitor their impact on tax compliance and revenue collection.

Although African countries are making significant progress in sending such requests, they are still net receivers of requests, unlike other developing countries which are generally net senders.

For instance, the number of EOI requests sent by African countries increased by 48 percent between 2018 and 2019, the report indicates.

But, the number of requests received by African countries has always been higher than the number of requests sent. Between 2014 and 2019, African countries sent 1,024 requests and received 2,802 requests. This implies that the continent is generally less interested in seeking information to track and curb such cross border financial crime than the rest of the world

“However, there are significant discrepancies among African countries on both incoming and outgoing requests”, the report further indicates.

Despite their reticence in general in seeking pertinent information, the increase in the number of EOI requests made by African countries has translated into additional tax revenue collected. In 2019, five African countries have identified nearly US$12 million in additional tax due them as a direct consequence of the EOI requests sent.

The international standards on tax transparency require every member country to disclose the ownership structure of legal entities and arrangements, including beneficial ownership, and ensure that tax administrations, like the Ghana Revenue Authority (GRA), are able to obtain reliable information to assess taxpayers’ assets and activities, no matter where these are carried out.

Given the high levels of illicit financial flows from African countries and recognising the potential of tax transparency and exchange of information to raise resources for development, African members of the Global Forum on Transparency and Exchange of Information for Tax Purposes during its conference in Germany in 2014 created an African focused programme: the Africa Initiative.

 

Source: goldstreetbusiness.com

About DavidBa Yaw Paul

Leave a Reply

Your email address will not be published. Required fields are marked *