By Otsile Malebaco
Exchange of Information (EoI) for tax purposes plays a critical role in global efforts to tackle tax avoidance and tax evasion that are part of the commercial Illicit Financial Flows (IFFs). It also considered to contribute to the fight against money laundering and other types of IFFs. Indeed, when national tax authorities have limited competencies and means to go after multinational companies and individuals abusing loopholes or hiding money outside of their jurisdiction, it is difficult to tax them. Although, Africa has made strides in adopting international EOI and tax transparency standards, , challenges such as capacity constraints, compliance difficulties and higher buy-in and political will remain. There is therefore a call for more work to strengthen institutional frameworks and build long-term capacities.
Insightful discussions took place at the African Tax Administration Forum (ATAF) Continental Exchange of Information (EOI) Conference from 16-18 October 2024 in Johannesburg, South Africa. The conference brought together officials from African Revenue Administrations, Regional Organisations and International Partners to discuss proposed EOI Strategy for Africa whilst sharing in-country experiences and noting challenges in implementing EOI international standards. The three-day conference included a series of high-level discussions on the state of EOI in Africa, the role of tax transparency to achieve sustainable development and strategies for enhancing inter-agency collaboration.
In her opening remarks, Ms Mary Baine, ATAF Deputy Executive Secretary, stated that “We appreciate EOI because it is underpinned by collaboration and international cooperation, at a time when the world seems increasingly fractured. We look to EOI because it is one tangible solution to the challenge of tackling tax evasion and related financial crimes that contribute to illicit financial flows, at a time when we are looking for practical hope in dealing with such a huge problem on the continent”.
ATAF’s EOI conference highlighted the continent’s progress and challenges in implementing tax transparency and combating IFFs. The collaborative efforts of African tax authorities, regional organizations, and international partners such as GIZ have significantly advanced EOI adoption in Africa. However, capacity building, institutional strengthening, and enhanced inter-agency cooperation remain critical. By addressing these challenges, African countries can fully leverage EOI to promote fair taxation, increase revenue collection and achieve sustainable development goals, ensuring long-term economic growth and transparency across the continent. The Conference sessions included:
- The African EOI Agenda: This session explored the need for political support in implementing EOI regimes, focusing on strategies for buy-in from highest levels of government. During this session, Ms. Birgit Pickel, Director-General for Africa in the Federal Ministry for Economic Cooperation and Development (BMZ) delivered her opening remarks congratulating ATAF and its member states in reaching impressive milestones by introducing EOI in 13 countries in Africa since 2009, resulting in some African countries raising additional revenues.
- Impact of Tax Transparency and EOI in Africa: This session highlighted success stories and discussed the role of tax transparency in achieving Africa’s Sustainable Development Goals (SDGs).
- Whole-of-Government Approach (Inter-agency Collaboration): A Presentation of a country case study on interagency collaboration for effective EOI, by Adv. Chrizelle Van der Spuy, Senior Legal Specialist from the South African Revenue Service (SARS) highlighting the relevance of transparency and exchanging information more widely across government agencies and lessons learned in how to build a government approach.
- EOI in Practice: This session provided practical insights into how African countries are leveraging EOI to combat IFFs and enhance revenue collection. Panellists discussed the integration of EOI into international tax audits and transfer pricing.
Exchange of Information (EOI) plays an important part in revenue collection administration, this includes increasing transparency and countering tax avoidance. ATAF has therefore recognised the vital need for African tax administrations to develop capable EOI units that will firstly assist auditors but will secondly also align to the recommendations of the High-Level Panel Report on Illicit Financial Flows (IFFs) to combat and prevent IFFs on the African continent.
The partnership between ATAF and GIZ has been lauded by the conference attendees and the request for continuous support to capacitate countries has been expressed, , as some countries have reached milestones in implementing EOI in their countries and aligning them to international standards. the In her closing remarks,Dr. Christiane Schuppert, Head of the “Good Financial Governance in Africa” Project stated that “One important goal of this project is to support countries to combat tax evasion and IFF by effectively exchanging tax information in line with international standards and to enable African countries to utilize these tools for enhanced collection and tax compliance.”
The GIZ Good Financial Governance in Africa project supports ATAF´s EoI work through the Multi Donor Action on “Fighting Tax Related Illicit Financial Flows in Africa”, which is co-funded by the European Union, the German Federal Ministry of Economic Cooperation and Development (BMZ), and the Ministry for Foreign Affairs of Finland.
