Angola will soon join the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum), an initiative that seeks to improve tax transparency. Photo: Provided
Angola has a mission to become more tax transparent, which can improve its rating for ease of doing business and prevent illegal financial flows.
The country has recently joined the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum), an initiative that strives for tax transparency.
“We are delighted to welcome Angola as the newest member of the Global Forum,” said chairman Gaël Perraud.
“The growing membership of the Global Forum underscores the importance of tax transparency by the international community and demonstrates the determination of governments to join forces in the fight against tax evasion and avoidance.”
The move makes Angola the 166th member – and the 35th African member – of the Global Forum.
The Global Forum implements international standards that guide taxation, tackling bank secrecy and tax evasion.
In a 2020 report by the United Nations Conference on Trade and Development (Unctad), it is estimated that African countries lose $88.6 billion annually due to illicit financial activities.
The 2022 report by the Organization for Economic Co-operation and Development shows that cross-border illegal financial activities can be controlled by increasing economic tools such as the exchange of information on request (EOIR). The Tax Transparency Report found that African countries have lost millions of dollars since EOIR became more widespread.
“Illegitimate financial activity weakens public finances … and poses a risk to the stability of global financial markets,” said Bernd Schlenther, an expert on illicit financial flows at the University of Pretoria’s African Tax Institute.
Angola is among the countries that previously ranked low on the ease of doing business index, partly due to gaps in taxation transparency.
A stronger governance structure “creates a hostile environment for illicit financial flows. It also deters illegal activity, prevents illicit financial flows,” Schlenther said.
The renewed charge by the state to improve taxation transparency comes as stakeholders are spreading efforts to promote ethical financial flows.
This is particularly important as South Africa and Nigeria were recently greylisted by the global anti-money laundering watchdog, the Financial Action Task Force, for their shortcomings in combating illegal finance and organized crime.
The African Development Bank and the Coalition for Dialogue in Africa (CoDA) recently launched a three-year support project to rapidly respond to illicit financial flows.
The joint fund by CoDA and the African Development Bank was one of the recommendations made in 2015 by the High Level Panel on Illicit Financial Flows.
Schlenther believes that strategic and deliberate pronouncements are critical to realizing key recommendations.
“The impact of the intervention is important because it targets the policy level, and the operational level and helps to raise awareness,” he explained.
However, as explained, while progress at the policy level has been accelerated, it is necessary to increase the operational perspective to achieve a holistic result.
He stressed the need for stronger measures targeting sectors such as mining, other extractive industries and wildlife.
“Illegal logging, illegal mining and illegal wildlife trade … lead to loss in biodiversity, environmental damage and growth in organized criminal activity,” he noted.
But with increasing awareness and consciousness, they show that better efforts, especially in Nigeria, show a new commitment.
Nigeria recently established a Wildlife Law Enforcement Task Force to address wildlife-related issues in the country and extend support services to the West African region. – bird story agency