According to a High Level Panel report, Africa loses more than 50 billion dollars annually in illegal capital outflows. Much of this money is lost through illegal activities supported by multinationals.
Now, the Ugandan Revenue Authority (URA) has pledged to support the campaign which seeks to end these Illicit Financial Flows (IFFs) which are threatening to bring the already fragile African economies to their knees. They are making it part of their plan to increase domestic revenues, by especially battling the outflows arising from smuggling, trade, misinvoicing, transfer pricing and other forms of aggressive tax planning.
Civil society organisations such as Southern and Eastern African Trade, Information and Negotiations Institute (SEATINI), Action Aid and Civil Society Budget Advocacy Group (CSBAG) have been at the centre stage of this fight to end the outflow that they put at more than 509 million dollars annually out of Uganda alone. This amount is equivalent to nearly half the yearly budget of a key sector ministry like agriculture.
The campaign advocates for policy reforms which would empower institutions such as the URA to mobilize more taxes form multinationals. It was launched last month in Kampala with a 2-day competitive students’ debate on illicit financial flows, human rights, inter-state competition and mining regimes in relation to taxation. The debate is part of the wider plan that seeks to engage young people in financial matters as well as orienting them on what Africa needs to transform its financial structure.
Mr Alvin Mosioma, the executive director of Tax Justice Network-Africa (TJN-A), said: ‘The competition is set to open up avenues for youth engagement on public finance management and particularly on funds generated from taxation.’
This accentuated an argument made by Jane Nalunga of SEATINI Uganda on tax as a contract between citizens and their governments: “Students need to understand that taxes don’t just come from workers’ salaries but even on their ordinary day-today purchases. Therefore they need to start asking questions on the use and management of those taxes,”
Image of the Makarere University in Kampala, Uganda, by Eric Lubega and Elias Tuheretze.