TACKLING TAX RELATED ILLICIT FINANCIAL FLOWS IN AFRICA

The partnership between the African Union (AU) and the European Union (EU) on taxation aims to tackle illicit financial flows (IFFs) and strengthen African countries' taxation capacity and their tax revenues thereby reducing Africa's dependence on foreign development finance. This multi donor action is being co financed by the EU Commission Germany and Finland in the spirit of Team Europe. Finnish funding is channeled through a delegated cooperation agreement through the German GIZ (Deutsche Gesellschaft fuer Internationale Zusammenarbeit). According to the AU's High Level IFF panel Africa loses more tax revenues through IFFs than it receives through development aid (ODA) or foreign direct investment (FDI) due to tax evasion and illicit financial flows (IFF). Therefore it is important to strengthen the capacity of key pan African accountability institutions to reduce illicit cash flows and increase tax revenues.The project aims to increase African Union Commission's (AUC) role and capacities to coordinate and monitor the progress of regional anti IFF actions. The action also aims to raise awareness about IFFs among various stakeholders AU Member States public institutions and Civil Society Organisations (CSOs). Furthermore the action endeavours to improve public institutions' accountability regarding IFFs. To that end transparency will be increased on existing anti IFF measures and on tax exemptions. The design adoption and implementation of anti IFF policies at national and regional levels will also be supported. The action will contribute to increasing effectiveness of pilot government efforts to tackle IFFs. It will focus on increasing their capacities to fight the phenomenon.In addition to AU the pan African partners participating in the project include the African Organisation of Supreme Audit Institutions (AFROSAI) African Organisation of Public Accounts Committees (AFROPAC) Collaborative Africa Budget Reform Initiative (CABRI) and African Tax Administration Forum (ATAF).Finland will participate in the co financing of the project in the steering group and in the AU EU dialogues on tax issues in 2021 24 with a total of EUR 3.4 million.