Uganda: Multinationals Should Pay Full Taxes, African MPs Say
Entebbe — Members of African Parliamentarian Network on Illicit Financial Flows and Tax (APNIFFT) want governments across the continent to put more pressure on multinational companies to pay full taxes.
According to the parliamentarians, tax evasion and illicit financial flow (IFFs) from Africa can be brought to an end if the African governments take a firm stand.
The chairperson of APNIFFT, Ms Khanyisile Tshabalala-Litchfield, said Africa cannot afford to look on anymore as multinational companies continue to dodge payment of taxes needed for development.
“We expect African governments to put more pressure on the multinational companies to pay their due revenues because if ordinary people are made to pay, how about these foreign corporations,” Ms Tshabalala said at a sideline interview of APNIFFT general meeting held in Entebbe on Monday.
She added: “Multinational companies are everyday devising new ways of tax evasion and our governments must be in position to develop capacity of our officials to deal with this vice.”
It was also revealed that the net outflows from developing countries, including the proceeds of tax evasion, far outweigh inflows of aid and investment.
According to the global financial integrity (GFI), Africa lost up to $ 1.5 trillion between 1980 and 2009 in IFFs, with up to two thirds of these outflows being through the extractive sectors across Africa. The amount, according to tax justice network-Africa policy and advocacy manager Savio Mwambwa, is just a conservative estimate, believing that more than this leaves Africa illegally every year.
Last month, Africa’s revenue authorities in Kampala moved to embrace a Double taxation treaty that is unique to the continent in an attempt to get rid of tax evaders, mostly multinationals robbing Africa of taxes.
The methods used
Losses. A report on illicit financial flows estimates that Uganda loses at least Shs1.5 trillion every year to illegal activities perpetrated by multinational companies. The money lost is nearly an equivalent of four times the budget allocated for agriculture.
Illegal methods. In the same report, the African Union/Economic Commission for Africa High Level Panel on Illicit Financial Flows from Africa shows that multinational companies in Africa deny the continent its due revenue through tax evasion, money laundering and false declaration.
Other illegal methods used include overpricing, transfer pricing, tax evasion, money laundering, corruption and false declarations, all posing a major threat to the development of the continent.
