Yes, capital flight must be resolved


LAST week, Economists launched a book ‘Lifting the Veil of Secrecy’, the perspective on international taxation and capital flight from Africa.

The book aims at unearthing the truth on how big companies and some individuals stash financial wealth to offshore accounts.

The authors who include Tanzanian Senior economist, Prof Honest Ngowi, Sigrid Jacobsen and Peter Ringstad and Prof Odd Helge Fjeldstad state categorically in the book that at least 30 percent held by Africa is illegally stashed in offshore tax havens across the World.

It is estimated that African governments lose roughly 15bn/- US dollars annually in illegal offshore tax havens. Also estimates of the magnitude of wealth held in tax havens remain imprecise, as most of it is hidden and scattered across a vast network of secrecy jurisdictions.

In 2014, it was estimated that 8trl/-US dollars of the personal financial wealth is in offshore accounts. The figure captured only financial wealth with exclusion of tangible assets.

From their investigations, the authors urged African governments in collaboration with development partners to strengthen the United Nations (UN) tax office so that it could come up with policies and regulations that will help to curb the problem.

Prof Fjeldstad believes that facing illegal stashing of financial wealth to offshore tax havens needs collective efforts and that the UN tax office must be involved. Yes, it is quite clear that curbing the illegal business need collective efforts, and it is high time African countries raise alarm on the matter.

Through collective efforts and involvement of UN tax office, the possibility to get crucial information from the countries where tax evaders and big companies stash money would be obtained.

With the support from the UN tax office, African countries will be able to pose questions and get answers on time from banks and various financial institutions that are suspected to be ‘safe home’ for stolen money from Africa.

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