URA backs campaign to end illicit financial flows
URA commissioner General Doris Akol said the tax body is keen on stopping outflows arising from smuggling, among other activities. FILE PHOTO
What you need to know:
- However, civil society organisations such as Southern and Eastern African Trade, Information and Negotiations Institute (SEATINI), Action Aid and Civil Society Budget Advocacy Group (CSBAG) have been at the centre stage of fighting the outflow that they put at more than $509m (Shs1.5 trillion) annually out of Uganda in particular.
- The debate is part of the wider plan that seeks to engage young people in financial matters as well as orientating them on what Africa need to transform it financial structure.
Kampala- Uganda Revenue Authority (URA) has pledged to support the campaign to end the Illicit Financial Flows (IFFs) that are draining the country’s economy as well as that of the continent.
The ‘Stop the Bleeding’ campaign seeks to end plunder from the African continent.
IFFs are illegal movements of money or capital from one country to another.
At the weekend, Ms Doris Akol, the URA Commissioner General told Daily Monitor that they will certainly support the campaign that was recently launched in Uganda.
“Yes (we shall support the programme) part of [our plan to] increase domestic revenues is stopping IFFs outflows, especially those arising from smuggling, trade, misinvocing, transfer pricing and other forms of aggressive tax planning. URA is already involved in some aspect of curbing IFFs,” she said.
Africa, according to the High Level Panel report released last year, loses more than $50 billion (about Shs165 trillion) annually in illegal capital outflows.
Much of this money is lost through illegal activities supported by multinationals.
However, civil society organisations such as Southern and Eastern African Trade, Information and Negotiations Institute (SEATINI), Action Aid and Civil Society Budget Advocacy Group (CSBAG) have been at the centre stage of fighting the outflow that they put at more than $509m (Shs1.5 trillion) annually out of Uganda in particular.
The amount lost is more than or equivalent to 60 years of budget for government agencies such as the National Bureau of Standards, an institution mandated to, among other things, get rid of substandard and potentially life-threatening counterfeit products flooding the country.
It is also nearly a half of the budget allocated to key sector ministries such as that of Agriculture.
The campaign was launched in Kampala last month to advocate for policy reforms that can empower institutions such as URA to mobilise more taxes from multinationals.
The event was supported by a students’ debate on tax justice which in itself will boost the fight against illicit financial flows.
The debate is part of the wider plan that seeks to engage young people in financial matters as well as orientating them on what Africa need to transform it financial structure.
Mr Alvin Mosioma, the executive director Tax Justice Network-Africa (TJN-A), said: “The competition is set to open up avenues for youth engagement on public finance management and particularly on funds generated from taxation.” His comment emphasised Ms Jane Nalunga’s argument on tax as a contract between citizens and their governments.
“Students need to understand that taxes don’t just come from workers’ salaries but even on their ordinary day-today purchases. Therefore they need to start asking questions on the use and management of those taxes,” she said.
To that effect, 30 students drawn from public and private universities in Kenya, Uganda, Tanzania, Rwanda and Burundi took part in the two-day competition debating illicit financial flows, human rights, inter-state competition and mining regimes in relation to taxation.
Strathmore University won the debating competition.
Speaking in an interview, Ms Nelly Busingye Mugisha, the programme officer, financing for development/tax justice at SEATINI-Uganda, said the debate which was organised by TJN-A and the SEATINI-Uganda in Kampala ahead of the IFFs launch will be an annual event.
She said the students’ involvement in these activities should not be underestimated, considering that they are the next generation of leaders. And for that, they should be armed with information that will help them fight the vice.
According to TJN-A and SEATINN-Uganda, the adoption of the Sustainable Development Goals, global commitments under the Financing for Development (FfD) for Agenda 2030 and the report of the High Level Panel on Illicit Financial Flows from Africa, has given tax justice activists greater drive to demand for concrete actions from the international community to combat illicit financial flows and support enhanced domestic resource mobilisation efforts.
How money is lost
The High Level Panel report indicates that Africa loses billions of dollars every year in illegal capital outflows, especially through the extractives sector.
These could be in form of profit-shifting, lack of transparency, financial secrecy, lack of clarity about beneficial ownership and inadequate reporting of payments.
This means that valuable resources that governments would have used for the provision of basic infrastructure, healthcare and education are lost on a large scale. TJN-A has been at the forefront in pushing the message that IFFs can no longer be considered an African only problem, but is a global challenge that needs addressing.
The campaign
Objective. The ‘Stop the Bleeding’ campaign launched in June 2015, seeks to create awareness among the public on the developmental impact of illegitimate capital outflows.
It aims at mobilising citizens to demand measures to curb illicit flows as outlined the recommendations of the report by the Mbeki-led High Level Panel which African governments have already adopted.
The campaign was initially launched in June 2015 in Nairobi, Kenya; the movement has been inaugurated across seven countries in Africa, with Uganda being one of them.
