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Tax, Good governance and the problem of illicit financial flows from Africa


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AU Permanent Mission in Brussels
Workshop - Assessing the Progress and Challenges in the Implementation of Addis Ababa Agenda for Action (AAAA)
Wednesday, 21 September, 2016
Luckystar Miyandazi & Faten Aggad

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Tax, Good governance and the problem of illicit financial flows from Africa

  1. 1. Tax, Good governance and the problem of illicit financial flows from Africa AU PERMANENT MISSION IN BRUSSELS MISSION PERMANENTE A BRUXELLES Workshop ASSESSING THE PROGRESS AND CHALLENGES IN THE IMPLEMENTATION OF ADDIS ABABA AGENDA FOR ACTION (AAAA) Wednesday, 21 September, 2016 Luckystar Miyandazi & Faten Aggad ECDPM
  2. 2. • Framing the IFFs debate: the PCSD agenda • Spotlight on illicit financial flows (IFFs) • On-going Efforts to Curb IFFs • Areas of potential Cooperation • Conclusion • Q&A Structure Page 2
  3. 3. Spotlight on illicit financial flows (IFFs) Page 3 Source: TrustAfrica infographics on “track it, stop it and get it” Report of the High-Level. Panel on Illicit Financial Flows from Africa, Commissioned by the AU/ECA Conference of Ministers of Finance, Planning and Economic Development in 2015.
  4. 4. ▪ National and Regional Efforts: ▪ AU: The adoption of the HLP Report on IFFs as a declaration during the 24th AU Summit and AAAA para 24 on IFFs ▪ AU Convention on Preventing and Combating Corruption ▪ APRM (African Peer Review Mechanism) ▪ Efforts to recover frozen assets (STAR) ▪ GIABA: Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) On-going Efforts to Curb IFFs-Africa Page 4
  5. 5. • Anti-Tax Avoidance Package adopted by the European Commission on 28 January 2016 -agreement for the automatic exchange of information on country-by- country reports (CbCR) of multinational companies, subject to UK scrutiny -agreement by Member States on their general approach for far-reaching new rules to eliminate the most common corporate tax avoidance practices. 21 June 2016 -agreement by Member States on the automatic exchange of information on cross-border tax rulings, just seven months after the presentation of the Commission's ambitious proposal on the subject. -Platform for Tax Good Governance (Includes non-government members) EU & Global Efforts Page 5
  6. 6. • The Global Forum on Transparency and Exchange of Information for Tax Purposes (OECD); • Multilateral Convention on Mutual Administrative Assistance in Tax Matters (OECD); • Extractive Industries Transparency Initiative; • Article 1504 of the Dodd-Frank Act (United States of America); • Foreign Account Tax Compliance Act (United States of America); • Public register (United Kingdom); • G20 instigated base erosion and profit shifting (BEPS) Action plan led by OECD process • Calls for UN like global body to deal with tax matters-Para 29 Global Efforts Page 6
  7. 7. • One key principle that is emerging with regard to tackling IFFs at the global level is improving transparency; I.automatic exchange of information and project-by-project reporting; III.public registries of beneficial ownership Areas of Cooperation Page 7
  8. 8. Can PCSD serve as a framework for dialogue on approaches to curb IFFs?
  9. 9. • Goal 16.4: “by 2030 significantly reduce illicit financial and arms flows, strengthen recovery and return stolen assets, and combat all forms of organised crime” • Goal 17.14: “enhance policy coherence for sustainable development” – One of the key innovations of the SDGs agenda • What is PCSD? “ An Approach and policy tool to integrate the economic, social, environmental and governance dimensions of sustainable development at all stages of domestic and international policy making… As policy tool, PCSD aims to increase governments’ capacities to identify synergies, consider trade-offs between multiple objectives – for example between economic growth, environmental protection and reduction of carbon emissions – and address potential spillovers of domestic policies” The SDGs and the PCSD Agenda
  10. 10. Framing the IFFs debate: the PCSD agenda Page 11
  11. 11. Sectors of attention to tackle IFFs
  12. 12. Linkages between interventions
  13. 13. • EU has a strong track record championing Policy Coherence for Development. Anticipated strong commitment to PCSD • Key opportunities for engagement around policy framework: the revision of the European Consensus on Development Opportunities for engagement
  14. 14. Thank you! Sign up to ECDPM free news and analysis Faten Aggad-Clerx- Head of Programme Africa’s Change Dynamics Luckystar Miyandazi- Policy Officer Africa's Change Dynamics Programme E-mail Twitter @FatenClerx @Lustarnde Further info Page 15