In
an effort to woo foreign investors to put their money in African
countries, many a leader has been offering incentives, including tax
holidays. For most of these countries, the aim has been to get capital
for investing in development projects, such as roads, railways, schools,
factories, health facilities and so on.
But there have also been cases highlighted where investors were accused of abusing the incentives.
But, as if this is not bad enough, in some developing countries foreign investors have been dealing in illicit businesses, according to the Executive Director of a non-governmental organisation going by the name of Tax Justice Network, John Christensen.
He says about USD 1trillion leaves developing countries, Tanzania included, in illicit financial flows and over USD50bn of that amount has come from the African continent each year.
He goes on to say that the proceeds of crime, corruption and tax evasion represent a drain on developing economies equivalent to eight times the size of global foreign aid.
This is happening at a time that the people in developing countries face insurmountable challenges in their daily lives. Some of their people cannot afford a square meal a day, leave alone getting their children to sit inside a classroom. The countries face challenges of poor education, health facilities, communication, infrastructure and so on.
The money which is stolen delays and denies the poor people chance to use their own resources to speed up development.
It has created a situation where the poor countries are forced to resort to expensive debts to finance development, when their own money is being spirited out to tax havens. It is this cruel irony which African countries are being urged to put a stop to.
It is more relevant now for the African countries to act together to influence policies that stem the flow of illicit. They can do so if they use their growing influence as a major resource base for the world economy.
We support the proposal given by Christensen that one way to get out of the problem that African countries face is to demand for transparency and cooperation on the issue of tax havens.
Cooperation in this field will go a long way, not only to curb the problem of illicit financial flows from developing countries as has been the case hitherto, but will also mean saving a lot of badly needed funds for use in various development activities.
What is required is for developing countries to act in unison and push through policies that seek to protect their resources to primarily benefit the people on the continent.
Unless this is done, developing countries like Tanzania will have no choice but to suffer silently as millions of shillings are siphoned to foreign countries.
The time to take action is now, and to start with African countries can take this as an agenda to be discussed in international fora, like the African Union and the United Nations via its many organs.
As the sages say: Better late than never. We need to deal with this issue now rather than later when the damage would have been irreparable.
But there have also been cases highlighted where investors were accused of abusing the incentives.
But, as if this is not bad enough, in some developing countries foreign investors have been dealing in illicit businesses, according to the Executive Director of a non-governmental organisation going by the name of Tax Justice Network, John Christensen.
Editorial Cartoon
He says about USD 1trillion leaves developing countries, Tanzania included, in illicit financial flows and over USD50bn of that amount has come from the African continent each year.
He goes on to say that the proceeds of crime, corruption and tax evasion represent a drain on developing economies equivalent to eight times the size of global foreign aid.
This is happening at a time that the people in developing countries face insurmountable challenges in their daily lives. Some of their people cannot afford a square meal a day, leave alone getting their children to sit inside a classroom. The countries face challenges of poor education, health facilities, communication, infrastructure and so on.
The money which is stolen delays and denies the poor people chance to use their own resources to speed up development.
It has created a situation where the poor countries are forced to resort to expensive debts to finance development, when their own money is being spirited out to tax havens. It is this cruel irony which African countries are being urged to put a stop to.
It is more relevant now for the African countries to act together to influence policies that stem the flow of illicit. They can do so if they use their growing influence as a major resource base for the world economy.
We support the proposal given by Christensen that one way to get out of the problem that African countries face is to demand for transparency and cooperation on the issue of tax havens.
Cooperation in this field will go a long way, not only to curb the problem of illicit financial flows from developing countries as has been the case hitherto, but will also mean saving a lot of badly needed funds for use in various development activities.
What is required is for developing countries to act in unison and push through policies that seek to protect their resources to primarily benefit the people on the continent.
Unless this is done, developing countries like Tanzania will have no choice but to suffer silently as millions of shillings are siphoned to foreign countries.
The time to take action is now, and to start with African countries can take this as an agenda to be discussed in international fora, like the African Union and the United Nations via its many organs.
As the sages say: Better late than never. We need to deal with this issue now rather than later when the damage would have been irreparable.
SOURCE:
THE GUARDIAN
