The ‘2024 Tax Transparency in Africa’ report shows that improved tax transparency, exchange of information (EOI) and related measures have enabled an increase in fiscal revenue for African countries.

The report was launched on June 3 as part of the fifteenth meeting of the Africa Initiative, jointly organised by the Global Forum Secretariat, the Office Togolais des Recettes and the Togolese Ministry of Economy and Finance in Lomé, Togo.

The report is the sixth edition of this yearly report that keeps track of the progress made by African countries in combatting tax evasion and other illicit financial flows (IFFs) through enhanced tax transparency and EOI.

The 2024 edition covers 41 African countries, including South Africa, and was co-produced by the Global Forum on Transparency and Exchange of Information for Tax Purposes, the African Union Commission and the African Tax Administration Forum.

It is a key output of the Africa Initiative, which was launched ten years ago by the Global Forum, as well as of its African members, partners and donors, to unlock the potential of EOI for African countries.

The report provides statistical information on the implementation of the tax transparency standards – Standard on Transparency and Exchange of Information on Request (EOIR standard) and the Standard on Automatic Exchange of Financial Account Information (AEOI standard) – and their contribution to domestic resources mobilisation (DRM) in Africa.

The report notes that tax transparency and EOI for tax purposes has had a significant impact on DRM in Africa, with seven of the 41 countries surveyed having reported identifying over €2.2-billion of additional revenues through EOI in 2023.

The report says this is the highest amount since the launch of the Africa Initiative in 2014, and more than the total sum of additional revenues identified by African countries from 2009 to 2022.

This figure brings the total revenues identified by African countries, owing to offshore tax investigations, AEOI-related voluntary disclosure programmes and similar initiatives, as well as other compliance activities, supported by EOIR and AEOI, to over €3.8-billion, up from €1.69-billion as of December 2022, it explains.

“I want to take the opportunity to acknowledge the tremendous progress of African countries in combating tax evasion and other IFFs and, in particular, in having done so through transparency and EOI for tax purposes, collectively you have demonstrated that the tools of greater transparency are crucial for better enforcement of your domestic tax laws, but also and ultimately, for enhanced resource mobilisation,” said Organisation for Economic Cooperation and Development (OECD) Centre for Tax Policy and Administration deputy director David Bradbury.

The report notes that, in 2023, two more African countries joined the Global Forum and the global efforts to combat tax evasion through tax transparency and EOI.

It adds that African countries also intensified the use of established EOI infrastructures to access information held offshore but which is key for resolving tax audits, investigations and other compliance activities with cross–border elements by sending more requests. The number of African countries either implementing the AEOI standard or committed to first exchanges by a specific date is now 12.

Additionally, two African countries have indicated their intention to implement the Crypto–Asset Reporting Framework (CARF), a dedicated global tax transparency framework which provides for the automatic exchange of information on transactions in crypto–assets in a standardised manner with the jurisdictions of residence of taxpayers on a yearly basis.

The report confirms that the growing participation of African countries in the implementation and use of EOI is generating additional revenues that would otherwise not have been collected, describing progress made by African countries as “remarkable.”

The report notes that one of the five African countries that are currently exchanging information automatically identified over €30-million in additional revenues, owing to the use of the financial account data received automatically.

The report indicates that African countries more than doubled the revenues – tax, interest and penalties – identified through offshore tax investigations including EOIR, voluntary disclosure programmes launched in the context of the implementation of AEOI, and effective use of the data received automatically, from a cumulative of €1.69-billion at the end of 2022 to over €3.8-billion was, on December 31 2023, identified by a group of 12 African countries.

“This progress is a result of both the growing political buy–in for the tax transparency agenda, and the enhanced capacity–building led by a coalition of donors and partners working together under the banner of the Africa Initiative.

“We remain steadfast in our commitment to help African countries address challenges in implementing and benefitting from the tax transparency standards to combat IFFs, promote tax compliance and enhance DRM,” the report states.

Further, the report notes that 19 African countries sent EOI requests in 2023. In aggregate, African countries also became net senders of EOI requests in 2023 making a total of 888 EOI requests, the highest number since the Africa Initiative was established, and receiving a total of 801 EOI requests, it explains.

The report notes, however, that the potential of EOIR is still underexploited on the continent as the use of EOIR – number of requests sent and additional revenue identified – is dominated by a handful of countries.

While most African countries have now put in place the essential building blocks for participating in EOl, the report notes, however, that the use of the EOl tools remain uneven on the continent and below its potential.

Togo Economy and Finance Minister Sani Yaya noted during her keynote address that tax administrations face significant challenges, such as corruption and tax evasion, that undermine a country’s revenue, as well as the confidence of citizens in their respective tax systems.

She posited, however, that these challenges could provide opportunities to strengthen regional and international cooperation, as well as foster innovative solutions.

“It is in this regards that the Africa Initiative is a model of cooperation between African States, and also urges African countries for political commitment under the leadership of the Global Forum in promoting the establishment and the use of international trade tools,” said Yaya.

She explained that, through its membership with the Global Forum, the country has adopted important measures to improve tax transparency and enhance its information exchange system. The country has also adopted structural reforms to improve tax transparency and modernise its tax administration.

Yaya thus argued that reginal and international cooperation, as well as partnerships with organisations such as the Global Forum, can help to establish a more transparent tax environment.

“This tenth anniversary of the Africa initiative that we are celebrating today will help us not only to take stock, but also to pave the way for the future,” she said.

“Let's continue working in partnership to build a future where every country can fully enjoy its tax resources, investing in the welfare of its citizens,” she added.

The report explains that capacity-building on tax transparency and EOI is one of the key mandates of the Global Forum. In 2024, the Global Forum secretariat and partners to the Africa Initiative will organise training events on different facets of tax transparency and EOI to address the specific needs of African tax authorities.

This includes collaboration with the network of Train the Trainer programme to continue delivering impactful training to their fellow officials, as well as promoting gender balance through the Women Leaders in Tax Transparency programme.

In addition, new targeted training and capacity-building initiatives will be considered to enhance the use of EOIR requests in African tax administrations during their audit and investigation processes.

“The Africa Initiative will continue to develop capacities to ensure that African countries actively use EOl and benefit from it by providing training to tax auditors and EOl officials, including through the Train the Trainer programme and other new innovative programmes,” the report outlines.