African countries, including Nigeria, lose approximately $50 billion annually to tax evasion, according to the African Tax Administration Forum (ATAF). Addressing the issue at the ATAF Annual Meeting in Kigali, Rwanda, ATAF Executive Secretary Logan Wort highlighted the significant impact of tax evasion on economic stability across the continent.
Wort revealed that 60% of these losses stem from corporate activities, particularly in the extractive industries like mining and oil exploration. Many companies exploit tax-free concessions, such as 10-year tax holidays, by underreporting discoveries or delaying declarations until the concession period expires, depriving governments of substantial tax revenues.
Additionally, 10–15% of tax evasion losses are attributed to corruption and aggressive tax planning, often facilitated by weak enforcement mechanisms and inadequate legislation.
Wort emphasized the need for robust tax policies, advanced technology, and international cooperation to combat tax evasion. Strengthening tax frameworks and adopting real-time monitoring solutions, such as information exchange systems between tax authorities and financial institutions, are critical steps.
He also stressed the importance of international tax agreements to facilitate secure information sharing, enabling authorities to detect irregularities and recover lost revenues.
The ongoing ATAF Annual Meeting continues to explore measures to curb tax evasion, focusing on implementing stronger legislation, leveraging technology, and fostering cross-border collaboration.