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Article

24 Aug 2016

Author:
Mark Curtis, Huffington Post (UK)

Africa: Countries lose revenues needed for development due to corporate tax incentives

"Africa’s Massive Revenue Losses From Tax Incentives", 5 Aug 2016

For over 30 years, Western countries...and international bodies like the World Bank and IMF, have told African governments to cut their tax rates to attract foreign investment. The result of this policy is now clear...governments in Africa are giving away vast amounts of badly needed revenues to foreign corporations in tax incentives...A report of mine for ActionAid, analysing the latest available figures, suggests that...Tanzania, Kenya, Rwanda and Uganda are likely losing $1.5 - $2 billion a year from tax breaks provided by their governments....Ghana is likely losing up to $2.27 billion a year while Nigeria has lost a staggering $3.3 billion in tax revenue to just three oil companies - Shell, Total and ENI - through a series of extraordinary tax breaks...Recently, even bodies like the World Bank and IMF have finally woken up to the indefensibility of promoting tax incentives...Studies suggest that tax incentives are not an important factor in attracting foreign investment...[S]ome ‘investments’ displace domestic companies that could better serve local populations; others can impoverish local communities by grabbing land or polluting the environment...