News / Africa

Tax Havens Cost Africa $38 Billion a Year

Report Claims Tax Havens Cost Africa $38 Billion a Yeari
X
May 11, 2013 3:05 AM
Campaigners are calling for the world's richest countries to end so-called tax havens, which allow companies to transfer profits among jurisdictions and reduce their tax bills. An investigation headed by former U.N. Secretary General Kofi Annan has concluded that the practice costs Africa $38 billion a year in lost revenue. Henry Ridgwell reports for VOA from London.
TEXT SIZE - +
Henry Ridgwell
— Campaigners are calling for the world's richest countries to bring an end to so-called tax havens, which allow companies to transfer profits between jurisdictions and reduce their bills.  An investigation headed by former U.N. Secretary General Kofi Annan has concluded that the practice costs Africa $38 billion a year in lost revenue.  

Activists claim multinational corporations are costing developing countries billions of dollars in lost revenue by transferring their profits to tax havens. Melanie Ward is spokesperson for the 'Enough For Everyone If' campaign.

"I think a lot of people here in the U.K. and around the world are fed up with tax dodging," said Ward. "They are fed up with a system where the rich and powerful play by a different set of rules to everybody else."

Tax havens and low tax jurisdictions - like Ireland - provide a level of secrecy and enable companies or wealthy individuals to cut their expenses, says Professor Ronen Palan of City University London.

"These countries offer very low taxation, either to corporations or to individuals.  And specifically they target non-residents," said Palan.

The Africa Progress Report, written by a panel of 10 prominent figures including former UN Secretary General Kofi Annan, concludes that African countries lose $38 billion a year through tax havens. Professor Palan cites more statistics.

"Africa exported about $1 trillion of capital in the last 30 years whereas inward investment in terms of FDI [Foreign Direct Investment] or aid is about $300 billion.  So Africa is losing capital.  Africa, or sub-Saharan Africa, is actually funding development elsewhere," he said.

The charity ActionAid alleges that brewing giant SABMiller uses a complex system of tax havens to siphon profits out of developing countries like Ghana.
 
SABMiller denies that it exploits tax havens.  It says in 2010 it paid more than $249 million in corporate taxes in sub-Saharan Africa and India.

ActionAid also alleges that Associated British Foods uses a network of subsidiaries to reduce its tax liabilities in Zambia by millions of dollars.  Associated British Foods says ActionAid's analysis is "incomplete at best and factually wrong in places."
 
Some argue that tax havens actually facilitate investment in the global economy, says Mark Littlewood, Director General of the Institute for Economic Affairs in London.

"This idea that, sort of, Western companies that are tax efficient are exploiting these places rather than bringing inward investment to them, I think, is a rather neo-imperialist old style way of looking at the world.  We want more of that inward investment.  That creates jobs and creates growth in some of the poorest countries in the world," said Littlewood.

British Prime Minister David Cameron has pledged to put the issue of tax havens on the agenda when he hosts the G8 Summit next month.

You May Like

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

This forum has been closed.
Comment Sorting
Comments
     
by: Mark
May 12, 2013 10:11 AM
The issue of suspect diamond and gold sales from Africa, is what should be discussed at the G 8 Summit, but what purpose would it serve as the G8 cannot enforce control measures - how would those involved be extradited, to what Country, and then prosecuted? mmm not hapening.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid