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The Tax Justice Network Africa(TJNA), on Wednesday said Nigeria and other African countries are losing an estimated $88.6 billion to Illicit Financial Flow (IFF) annually.
Consultant to TJNA, Prof. Waithaka Iraki, from University of Nairobi, Kenya, made this known in Abuja at the launch and dissemination workshop of study report on Tobacco Industry and Illicit Financial Flows in Africa.
The event was organised by Civil Society Legislative Advocacy Centre (CISLAC) in collaboration with Tax Justice Network Africa (TJNA).
Iraki while reading the policy brief on “Africa should not be Tobacco’s wild-wild west” said this was mainly propagated for tax evasion by multinational companies operating on the continent.
”The AU/UNECA’s High-Level Panel on Illicit Financial Flow (IFFs) Report 2015 brought to the world stage the scourge of IFF on sustainable development and revealed that more than $50 billion annually was being siphoned in the continent .
“Recent data from the United Nation’s conference on Trade and Development’s Economic Development in Africa report 2020 indicates that IFF have nearly doubled and Africa is now losing over $88.6 billion.
“Tax evasion strategies to include illegal and exports; such are taxed differently and the difference can lead to tax loss, illegal production and sale, forging data to obfuscate information that would be used by tax authorities.
“It also noted that political instability could also enhance tax evasion.
“Tobacco firm’s’ revenue were surprisingly steady even during the COVID-19 pandemic, laws should be tightened to reduce advertising and promotions which keep the demand high,’’ he said. Iraki said that clearly African governments had not done enough to reduce the tobacco induced burden, adding that the current regulation should be revisited.
He said that low-level competition in the tobacco industry from planting to selling and cigarette making gives tobacco firms too much power.
He added that regulation should induce competition along the tobacco supply chain because more competition would reduce the profits and disperse the power of tobacco firms. He said that the incentives offered to tobacco firms are not commensurate with their contribution to the economy; and seem to ignore the health cost .
“Tobacco money is made in Africa but the money goes elsewhere to shareholders outside the continent ,’’he said.
Also speaking, the Director of Customs Union and Taxation , Tiemtore Salifou represented by Tax Advisor ECOWAS commission, Lucien Ametchowou, explained that with the establishment of an ECOWAS Common External Tariff (CET), the West African Region is taking another step towards the completion of the common market.
