Ghana lost an estimated amount of $4. 9 billion between 1970 and 2008 as a result of capital flight.
About US$854 billion flowed out of Africa illegally between 1990 and 2008, an amount which could have paid off the continent’s debt and excess of $600 billion to reduce poverty and stimulate economic growth.
According to the Tax Justice Network, Africa, an advocate for a democratic and progressive taxation system in Africa, almost $1,200 billion left developing countries every year due to capital flight.
Offshore financial centres have been cited as promoting capital flight from developing countries through tax evasion and avoidance schemes such as trade mispricing often employed by multinational companies to evade national tax authorities, a phenomenon that has existed for decades and enhanced by lack of monitoring, evaluation and strict adherence to laws.
Government officials have also been cited as worsening the issue through the stealing of public funds, coupled with criminal acts of racketeering and counterfeiting, with a global terrain that encourages such activities by providing anonymity and secrecy for the movement of such funds.
In view of the above, the Integrated Social Development Centre (ISODEC) and the Ghana Tax Justice Coalition, in solidarity with the global campaign to end tax haven secrecy, held stakeholders forum at the Teachers Hall on Friday to mark the inception of the campaign.
The forum, among others, heard presentations on the negative effects of tax haven secrecy on accountable governance and domestic tax revenue mobilisation, reviewed the status of Ghana’s plans of becoming an offshore financial centre and made specific demands on the government.
In addition, it encouraged dialogue among all relevant tax stakeholders in finding a common ground for policy change; collated signatories for petition to the EU and the G20 nations and views for policy engagement with the legislature and relevant tax policy units.
Speaking on the topic: “Offshore financial sectors and how they impact developing countries like Ghana”, a tax expert and Managing Consultant of WTS, Nakyea & Adebiyi, Mr Abdullah Ali-Nyakyea, stressed the need for the government to review or enact laws to create the necessary conditions to ensure transparency in financial intermediation and retention of capital in the country.
He mentioned money laundering, tax evasion and illicit capital flight as some of the negative effects of offshore financial centres aided by their low tax systems and strict adherence to client secrecy and sometimes anonymity typical of the sector.
Source: Daily Graphic Ghana