Online Reporter
G20 Summit graphic
Prosper Ndlovu,[email protected]
AHEAD of the G20 Summit slated for November 23 to 25 in Johannesburg where South Africa will assume the rotational presidency, the African Tax Administration Forum (ATAF) says stemming Illicit Financial Flows (IFFs) should be prioritised in the agenda, as well as broadening Domestic resource Mobilisation (DRM) to enhance the African continent’s economic resilience.
The Group of Twenty (G20) is an international forum of both developing and developed countries that was established to find solutions to global economic and financial issues.
The G20 members include the world’s major economies, representing 85 percent of global Gross Domestic Product (GDP), over 75 percent of international trade, and about two-thirds of the world population.
The grouping comprises 19 countries including: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Türkiye, United Kingdom, and United States and two regional bodies, namely the European Union and the African Union.
Given the significance of DRM in the G20 Development Working Group (DWG)) priorities, to which ATAF is a taskforce member as part of efforts to steer the attainment of the global Sustainable Development Goals (SDGs), experts have called for concerted efforts in curbing IFFs, which continue to drain critical development resources from Africa.
“DRM efforts continue to be undermined significantly by Illicit Financial Flows (IFFs),” said ATAF in its latest submissions on priority commitments to be factored during G20 Summit debates.
The regional tax lobby group has affirmed that strengthening DRM requires a multi-faceted approach, including tax and trade policy reforms, tax and customs administration improvements, expanding the tax base, and combating tax-motivated IFFs such as transfer mispricing, trade mispricing, or mis-invoicing.
It further noted that the summit must also deliberate on effective natural resource revenue management, promoting voluntary compliance, leveraging technology, adopting the use of unique identifiers, anti-corruption measures, and improving transparency to enhance cross-border cooperation.
“Bringing the IFFs priority in the G20 DWG was a success for the South African presidency, which champions combating IFFs and financing for development.
“ATAF looks forward to being part of the drafters of the road map for the implementation of the voluntary, non-binding high-level principles to combat IFFs commissioned by the G20,” said ATAF.
“Additionally, implementing automatic tax and customs information exchange and beneficial ownership disclosure can curb financial leakages.”
As a member of ATAF, which is headquartered in Pretoria, South Africa’s G20 presidency is expected to guide the agenda and amplify Africa’s taxation interests in consultation with other members and in response to developments in the global economy. Zimbabwe is also a member of ATAF.
As such, ATAF has noted the key role of a multi-faceted approach to combating tax-motivated IFFs in the negotiations of the G20 DWG. Further, ATAF has also underscored the relevance of DRM in bridging the financing gap for development as a significant milestone in driving transformation and the necessary resources to finance development.
Already the G20 DWG has acknowledged that financing is not only a discussion of finance ministers but also for development ministers, which demands consensus and cooperation amongst G20 members.
Commenting on the progress made so far, Ms Josephilda Nhlapo-Hlope, chairperson of the G20 DWG and Outcome Facilitator at Department of Planning, Monitoring and Evaluation (DPME) was quoted as saying: “We are seeing a stronger voice from the Global South that is shaping the future of multilateral development cooperation”.
