engaged in strings of activities and developed tools supporting reforms that target IFFs and BEPS while increasing the ability of member states to raise more resources for inclusive growth and sustainable development.
For example, the African Union through the work of sub-committee on tax and illicit financial flows (IFFs) of the STC has developed two strategies, on Tax and on IFFs, which were adopted by Policy Organs of the Union. These strategies, continue to guide the work of the AUC and its partners to effectively advance the domestic resource mobilisation and fight against IFFs agendas in Africa. The strategies have focused on alignment of tax policies with administrative practices, expanding the tax base to potentially lower tax rates, and harmonizing tax policies to limit inter-country competition.
The relevant activities carried out by the organizations separately or jointly include, but are not limited to, in-country support and capacitation of members in tax audit, information exchange, research analysis, transfer pricing, digitization, tax and gender, etc. Other activities are the enlightenment of members on the new global rules like the two-pillar approach, production of tools and products like the Suggested Approach to the drafting of Qualified Minimum Top-up Tax (QDMTT), through regional consultation workshops on international tax reforms, policy briefs on carbon taxation, research briefs on tax expenditure, a comprehensive insight on income tax policy for cryptocurrencies, tariff revenue implication of the AfCFTA, the ongoing work on Policy tracker for IFFs; amongst others.
In furtherance of its commitment to deepen African leadership on continental tax reforms, the AUC, in collaboration with ATAF, TJN-A and related organizations, seeks to track and measure the impact of different policies and measures taken against IFFs in different countries, push for inter-agency cooperation to tackle IFFs within member states while aggressively enlightening members, through more regional consultations, on the policy implications and options of the recently concluded global tax policies which bear domestic ramifications for the Continent.
2. African Leadership on Global Tax Reforms.
Several Ministerial meetings of the STC have emphasized the importance of the participation of the Continent in the processes of global standard-setting and the contribution of African policy positions to such bodies. These have given impetus to the engagement of selected African countries and institutions in the activities of organizations such as the OECD-Inclusive Framework (IF) and the United Nations Committee of Experts on International Tax Cooperation (UNTC).
Since 2016, some African countries have joined the OECD-Inclusive Framework. Africa has 27 members in the organization, with four countries participating in its Steering Group. The Inclusive Framework was tasked with developing rules to tackle BEPS, and they have worked to produce BEPS 1.0, comprising the 15 Action plans, and BEPS 2.0, which includes the two-pillar solutions. While it is true that the Continent participated at both IF and UNTC, showing outstanding leadership, having produced co-chairs for both the IF-Steering group and the UNTC, such leadership has translated into rules that partly solve African problems like BEPS and IFFs and a lot more has to be done.
