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African Union (AUC) Member States representatives, public policymakers and private sector, civil societies, the media, international organisations, and development partners working on illicit financial flows have adopted a declaration that reaffirms their commitment to supporting AUC and its partners in their advocacy for a common African position in the global tax reform agenda.
This declaration, also known as the Tunis Declaration, was made at the Pan-African Network Conference on Fighting IFFs in Africa, which took place from 26 to 28 June 2024 in Tunis, Tunisia. The conference was organised by the AUC in collaboration with Tax Justice Network Africa (TJNA) and the African Tax Administration Forum (ATAF).
The meeting underscored the urgent need to address illicit financial flows, which pose an unprecedented threat to achieving the aspirations of Africa's development framework Agenda 2063 and the Sustainable Development Goals (SDGs). Revenue loss through illicit financial flows has nearly doubled from US$50 billion annually, as reported by the findings of the AU-UNECA High-Level Panel (HLP) on Illicit Financial Flows in 2015, to approximately US$88.6 billion, which is about 3.7% of the continent's total GDP.
Tax incentives contribute to a further US$220 billion loss and can play an important role as an enabler or facilitator of IFFs. Finally, US$40 billion is lost annually from the continent via the extractives sector, underscoring the urgency of the issue.
Ms Jane Nalunga, TJNA's Chairperson, called on participants to work both domestically and at the global level to make progress in combatting illicit financial flows. She further noted that addressing the gaps in international tax systems will improve the system for developing countries and the global community.
"We congratulate the African Group leading this work. For the first time, we, as Africans, are setting the tax agenda at the international level in the hope of establishing a tax system that will work for all of us,” she noted.
While there have been notable continental and international efforts to curb illicit financial flows, participants reaffirmed their commitment to intensifying Pan-African collaboration to speak with one voice in the global debate and follow a joint, coherent and systematic approach to global tax reforms.
"Over the past 2 days, we worked together with one of our regional partners, the Tunisian Observatory of Economy, to understand our role as CSO in the global tax reforms. Together as CSOs, we have been working towards raising citizens’ awareness of the challenge of illicit financial flows,” noted Chenai Mukumba, TJNA’s Executive Director.
Ms Mukumba also stressed the importance of addressing inequality in the distribution of taxing rights, which is also reflected in debt and trade. She further called on participants to harness the transformative power of taxation in addressing gender inequality across Africa.
" As we think about tax and gender, we also need to increase the gender-disaggregated data we are producing to create an appropriate policy to address inequality and to push this within the revenue authorities," she added.
In the declaration, participants also underscored the importance of supporting initiatives by partners, such as guidelines and tools for measuring illicit financial flows, to enable precise and effective policymaking and evidence-based responses to combat illicit financial flows. Such tools include the Anti-Illicit Financial Flows (IFFs) Policy Tracker Tool, which is designed to monitor the implementation of national-level policies to combat IFFs.
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