Al Jazeera video highlights findings of report claiming that tax avoidance by multinational companies in Africa undermines development
All components of this story
Author: Al Jazeera
Money taken illegally from the developing world is worth 10 times annual global aid budgets, according to a recent study by a Swedish agency, Forum Syd. Tax evasions by multinational companies in Africa is so vast that one tax analyst believes that if the money were paid, most of the continent would be "developed" by now. But, lacking a sophisticated tax code, or the people qualified to enforce tax laws, many African countries continue to lose money that could solve most of its financial problems.
Author: Kristina Fröberg, Attiya Waris, Forum Syd
Development organisations and academics in Africa and Europe agree on the measures needed at the international level to put a stop to illicit capital flight. To end the secrecy that enables it, they for example call for automatic and multilateral exchange of information between tax authorities, as well as imposition of sanctions on tax havens that do not cooperate. Another critical measure would be to require multinational companies to report the profit they make and taxes they pay in each country where they operate...Christian Aid has estimated that due to just two forms of illicit capital flight (‘mispricing’ and ‘false invoicing’ by multinational companies, which are explained on page 17-18) developing countries are losing US$160 billion per year in tax revenue. This is more than one-and-a half times the combined aid budgets of the entire rich world, which is around US$100 billion...Big multinational companies often have more resources than small and medium sized companies to hire lawyers and professionals that could help them pursue illicit capital flight without getting caught.
- Related stories: Al Jazeera video highlights findings of report claiming that tax avoidance by multinational companies in Africa undermines development
- Related in-depth areas: Latest news on tax avoidance