•Study reveals the nature of secretive tax havens behind failure of the global corporate tax system
Mauritius and the United Arab Emirates are the most attractive tax havens for Africans, a new report has shows.
The Corporate Tax Haven Index (CTHI) by Tax Justice Network which studied nine African nations, says weak tax systems experienced in Botswana, Gambia, Ghana, Kenya, Liberia, Mauritius, Seychelles, South Africa and Tanzania are to blame
The study reveals the nature of secretive tax havens behind failure of the global corporate tax system.
The CTHI shows dispossession of low-income countries’ tax rights, and this is done by nations including, United Kingdom, the United Arab Emirates (UAE), and France.
The countries undermine ability of governments across the world to meaningfully tax multinational corporations.
These nations, according to the report, take advantage of minimal and otherwise non-existent transparency, systemic loopholes and non-implementation of anti-avoidance mechanisms in a racket where an estimated $500 billion in corporate tax is dodged each year globally by multinational corporations.
“The Kenyan government is shifting the burden of taxation to the ordinary citizen, while deliberately opening doors for the wealthy elite and unscrupulous MNCs to evade and avoid taxes," said Alvin Mosioma the executive director of Tax Justice Network Africa.
He added that double tax avoidance agreements are being exploited negatively.
The report, narrowing down to Africa, says the UAE and Mauritius, are the continent’s most notorious countries in terms of driving down the withholding tax rates of countries through treaties.
“As confirmed by the recent IMF study, DTAAs signed by African countries with tax havens do not lead to increased investments,’’ he said. Unfortunately, many African countries are increasingly opening themselves to exploitation.
The network wants governments of Kenya and other African Governments to review the old and outdated DTAAs particularly with tax havens and ensure that those currently under negotiation do not undermine domestic resource mobilisation efforts.