Tuesday, 23 July

Ghana loses $1.4bn yearly from illicit financial flows – Tax Justice Network Africa

Business
Ghana is highlighted as one of the top countries suffering significant revenue losses through tax evasion, tax exemptions, and systemic tax inefficiencies

Ghana is losing approximately $1.4 billion annually due to illicit financial flows, according to the Tax Justice Network Africa (TJNA).

The nation is highlighted as one of the top countries suffering significant revenue losses through tax evasion, tax exemptions, and systemic tax inefficiencies.

In an interview with journalists during the African Parliamentary Network on Illicit Financial Flows and Taxation Summit held in Ghana, Mr Francis Kairu, Strategic Programmes Director at TJNA, emphasised the urgency of addressing these issues.

"Our governments must also acknowledge that the problem is a major issue, and I think the biggest challenge in our generation now is the issue of illicit financial flow,” adding: “Ghana is one of the countries that loses the most because you have natural resources, you have a huge population that is being taxed."

Mr Kairu elaborated on the impact of multinational corporations operating in Ghana, noting, "You also have multinational companies in this country and you are losing over $1.4 billion every year to the activities of these multinationals and illicit financial flows. Ghana is one of the countries that grant tax exemptions and tax holidays every other day."

The broader African context is equally concerning, with the continent losing nearly $89 billion annually due to illicit financial flows, as revealed in a report by the United Nations Conference on Trade and Development (UNCTAD).

The report identifies Africa as a 'net creditor to the world,' indicating a substantial outflow of capital from the continent.

Experts attribute almost half of the total financial loss to the under-declaration of export values for commodities such as gold, diamond, and platinum.

Companies engaged in such practices are accused of evading taxes and royalties, exacerbating the continent's financial drain.

Source: ClassFMonline.com