Report says trade mispricing robbing African countries billions that could be used for education, health & other vital social services

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Article
12 May 2014

Africa's Poorest Nations Lose Billions to Complex Tax Evasion Schemes

Author: Finbarr Bermingham, International Business Times (UK)

African countries are losing up to 12.7% of their national GDP due to shady practices in international trade…Global Financial Integrity, a Washington DC-based think-tank, reports that $542bn…worth of capital was lost from Africa in illicit capital flows and estimates that almost 80% of this coming through "trade misinvoicing"…Misinvoicing is where companies and individuals involved in trade deliberately alter the prices of their exports or imports in order to move money in or out of a country…The report, entitled Hiding In Plain Sight, examined trade flows into and out of Ghana, Kenya, Mozambique, Tanzania and Uganda between 2002 and 2011. Uganda lost 12.7% of its national revenue over the 10-year period, the highest of the five countries…Richard Murphy, director at Tax Research…agreed…that…tax avoidance is driven by western companies, some acting legally, others illegally…

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Article
12 May 2014

African Countries Lose Billions through Misinvoiced Trade

Author: Clark Gascoigne, Global Financial Integrity

The fraudulent misinvoicing of trade is hampering economic growth and potentially resulting in billions of U.S. dollars in lost tax revenue in Ghana, Kenya, Mozambique, Tanzania, and Uganda, according to a new report...by Global Financial Integrity (GFI), a Washington DC-based research and advocacy organization. The study...finds that the over- and under-invoicing of trade transactions facilitated at least US$60.8 billion in illicit financial flows into or out of the five African countries between 2002 and 2011. “It is deeply disconcerting that illicit financial flows are taking such a serious toll on the economies of Ghana, Kenya, Mozambique, Tanzania, and Uganda,” noted Mogens Jensen, Danish Minister for Trade and Development Cooperation...["These funds] could otherwise have been used for investments in infrastructure, schools, hospitals, and other much needed public services. I hope that the study can help the governments in their efforts to curb illicit financial flows.” [refers to Tullow Oil & Africa Oil Corporation]

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Article
12 May 2014

[PDF] Hiding in Plain Sight: Trade Misinvoicing and the Impact of Revenue Loss in Ghana, Kenya, Mozambique, Tanzania, and Uganda: 2002-2011

Author: Global Financial Integrity (USA)

Between 2002 and 2011, US$60.8 billion moved illegally into or out of Ghana, Kenya, Mozambique, Tanzania, and Uganda using trade misinvoicing. The five countries lost a tremendous amount of government revenue due to trade misinvoicing. Uganda led the group with an estimated loss of 12.7% of total government revenue, followed by Ghana (11%), Mozambique (10.4%), Kenya (8.3%) and Tanzania (7.4%).

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