OECD: Tax transparency in Africa 2022

The Organisation for Economic Cooperation and Development (OECD) today issued the report Tax Transparency in Africa 2022 [PDF 6.92 MB] which documents the region’s latest progress in tackling tax evasion and other illicit financial flows through transparency and exchange of information (EOI) for tax purposes.

As explained in today’s OECD release, the report covers 38 African countries and is a co-production of the Global Forum on Transparency and Exchange of Information for Tax Purposes, the African Union Commission, and the African Tax Administration Forum. It measures the impact of the Africa Initiative’s work and details capacity-building activities carried out by the Global Forum and its partners in 2021.

Major achievements in recent years include:

• Twenty-two African countries are now parties to the multilateral Convention on Mutual Administrative Assistance in Tax Matters, the most comprehensive instrument for all forms of  co-operation to tackle tax evasion, thus considerably expanding their exchange of information (EOI) relationships networks (4,135 bilateral relationships in 2021, compared to 913 in 2014).
•  Effective infrastructures for information exchange are being set up, with the majority of countries establishing well-functioning competent authority units within their tax administrations. As a result, the number of countries sending requests for information is increasing (15 in 2021, from six in 2014), and the total number of requests sent is growing steadily (up 26% in 2021 compared to 2020).
• Ten  African countries have committed to automatic exchange of financial account information (AEOI) by a specific date.
  
• Nine African countries collectively reported collecting over €233 million as a direct result of EOI on requests (EOIR) since 2014. In all, at least €1.2 billion in additional revenue (tax, interest and penalties) have been identified in the region since 2009, through voluntary disclosure programs launched prior to the first automatic exchanges, EOI, and offshore investigations.
• Fifteen hundred African tax officials have been trained to build capacity on the use of EOI instruments in 2021.

New political engagements further reinforced the multilateral efforts to advance tax transparency in 2021: Algeria joined the Global Forum—becoming the 33^rd Africa Initiative member—and signed the Yaoundé Declaration. Rwanda also added its voice to this important initiative, which now counts 34 signatories.

While showing swift and positive developments, the report points out uneven progress across the region. Four countries alone accounted for 92% of all EOIRs sent by African countries in 2021; and four from the six countries assessed in the second round of EOIR peer reviews so far were rated partially compliant, showing common difficulties in the implementation of the EOIR standard, which includes advanced beneficial ownership requirements.