The African Sovereign Debt Justice Network brings to you an update of African sovereign debt news and updates on events and happenings on and about Africa that reveal how sovereign debt issues are engaged by the various stakeholders.
Illicit Financial Flows
The primary objective of this post is to highlight the importance and gravity of the existing tax evasion in Latin America and the Caribbean today. A study conducted by Santiago Diaz de Sarralde Miguez reports that Latin America and the Caribbean are characterized by a relatively low tax burden, which averages 22.8% of GDP. That is 11.5% less than the OECD (2015). While it is true that there are large differences between countries, as the tax burden varies from 12.4% in Guatemala to 38.6% in Cuba.
Development, particularly in developing countries, in the current context requires thinking about how multiple global crises are interlinked, their impact on development prospects, and the narrative framing needed to generate positive and progressive systemic policy change.
In the meantime, since the re-entry of Mozambique into the international debt markets may take time, the poor communities may not have the wherewithal to survive that long. So, what is the last piece of the puzzle? An IMF arrangement with conditionalities? What conditionalities? My next piece intends to consider this.
The quality of public service delivery has been shown to affect tax non-compliance in an important way. Among other issues that have been attributed to low tax revenues in Nigeria, the State of the fiscal social contract can be said to be the single most important underlying cause. While there remains a depth of systemic issues to be resolved in order to rebuild the broken links in the fiscal social contract properly, the predicted post-pandemic impact on digital communication and business provides Nigeria with the opportunity to leverage on digital growth and engagement to bargain a stronger social contract, particularly with its largest demographic.
Rwanda envisions itself as the next Luxembourg or the next Singapore; a new financial center that will turn East Africa into an international power player and will service financial transactions throughout the African continent and beyond. While other financial centers are often accused of being tax havens, Rwanda is determined to avoid that label. It says the new hub, the Kigali International Financial Center (KIFC), will not allow business activity designed to avoid taxation. Details are forthcoming but Rwanda Finance Limited, the government entity that is developing the project, says all investments at KIFC must have a substantive business and economic purpose.
This paper aligns with Godwell Nhamo who states that ‘if the SDGs are to be a vehicle for poverty eradication in Africa, then the continent needs to do more for itself, including domestic mobilization of financial resources’. In essence, effective partnerships or collaborations (e.g. between government, academia, public sector, private sector, civic society and local communities amongst others) need to be developed in order to achieve sustainable SDGs outputs.
Appel à contributions
DÉMOCRATIE CONSTITUTIONNELLE, ÉTAT DE DROIT ET LUTTE CONTRE LA CORRUPTION
Call for papers
CONSTITUTIONAL DEMOCRACY, RULE OF LAW AND THE FIGHT AGAINST CORRUPTION
the responsibility to build a nation rests upon its policy-makers, lawyers and accountants. It is a collective one. The next step is to bring all stakeholders to the round-table and contribute to the global tax system from a protectionist standpoint. The lure of subscribing to the global fiscal commons must be tempered with the need to protect the tax bases and revenue of the fiscal sovereign. The time to act is now and right.