Africa scores United Nations win against tax avoidance

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On 22 November a decision from the Africa Group on the UN passed overwhelmingly, marking a step in direction of a United Nations framework conference on worldwide tax cooperation. This is able to shift management of worldwide tax guidelines from the Organisation for Financial Cooperation and Improvement (OECD) – shaped of 38 richer nations – to the UN, the place the 193 member states are on a extra equal footing.

Governments in Africa rely greater than these elsewhere on tax yields from multinational companies – not least due to the difficulties they face in gathering home tax. However these companies can – for the time being fairly legally – keep away from tax by reserving their earnings in low-tax jurisdictions.

In 2021 economists Javier Garcia-Bernardo and Petr Jansky estimated that this profit-shifting prices African nations about 7% of their whole tax revenues. The OECD framework has been described as “just about a colonial tax system”.

Reacting to the vote, Kenya’s everlasting consultant to the UN Martin Kimani observed that the “voting report on an Africa-sponsored decision on worldwide tax cooperation is the clearest World North vs World South vote I’ve seen in latest occasions”.

Foyer group the Tax Justice expanded this: the 48 nations that voted towards the movement “are answerable for 75% of all nations’ losses to tax havens”. The 125 in favour included 51 of the 54 member states in Africa.


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