Malawi, others lose $50 billion in tax evasion

MALAWI, and other African countries are losing more than $50 billion through illicit financial outflows per year, much of this linked to tax avoidance and evasion, according to latest findings by The United Nations Economic Commission for Africa (Uneca).

Meanwhile, with an eye towards how to stem the losses, Malawi and African ministries of finance and tax authorities are on record to have met in Kampala last week, as the African Tax Administration Forum released recommendations on how governments can improve tax intake.

This coincides with news that the African Tax Outlook 2017, which includes the input of 21 national tax authorities and outlines steps for policymakers to rake in public funds that could be used to fuel development.

Uneca has since said African nations will have more resources at their disposal to meet the Sustainable Development Goals if their national revenue authorities can boost tax collection. “The report argues that if tax revenue grows faster than the economy, African nations will have greater funds at their disposal for public investments in areas such as education and health care.

The key barriers today boil down to weak tax laws and incapable tax administration infrastructures,” the findings read in part. In documenting the experiences of other African nations, the report gives guidance including analysing the strengths and weaknesses of implementing various taxes, and providing tips on making the collection

process more efficient. “By restructuring outdated tax laws and then improving enforcement of these laws, African nations could close the gap between policy and implementation and collect billions in public revenue, which would better equip them to tackle development goals,” it says. According  to a 2014 report published by Christian Aid and the Tax Justice

Network Africa, tax systems across the continent have traditionally been weak, due in large part to heavy dependence on natural resource extraction and undiversified economies. “Country elites control wealth through opaque tax haven structures, and tax authorities have limited capacity to combat the problem,” the report added at that time.