Tax Tobacco: Africa losing $88.6bn to illicit financial flows – TJNA

The Tax Justice Network Africa has revealed that recent data from the United Nation’s conference on Trade and Development’s Economic Development in Africa report 2020 indicate that Illicit Financial Flows (IFFs) have nearly doubled and Africa is now losing over $88.6 billion.

The Consultant to TJNA, Prof Waithaka Njuguna Iraki said this at the launch and dissemination workshop of a study report on Tobacco Industry and Illicit Financial Flows in Africa organized by Civil Society Legislative Advocacy Centre (CISLAC) in collaboration with Tax Justice Network Africa (TJNA).

He listed some of the means of evading tax to include; illegal production and sales, fudging data to obfuscate information that would be used by tax authorities saying African governments have not done enough to reduce the tobacco induced burden.

He noted that the low-level competition in the tobacco industry from planting to sales and cigarette making gives tobacco firms too much power.

He said the regulation should induce competition along the tobacco supply chain stating that more competition would reduce the profits and disperse the power of tobacco firms.

He said the incentives offered to tobacco firms are not commensurate to their contribution to the economy; and seem to ignore the health cost .

According to him, such cost and any other cost from tobacco should be factored in giving this industry any incentives and disincentives are preferred.

Also, the Director of Customs Union and Taxation, Tiemtore Salifou represented by Tax Advisor ECOWAS commission, Lucien Ametchowou explained that with the establishment of an ECOWAS Common External Tariff (CET), the West African sub-region is taking another step towards the realization of a common market.

He said the unification and harmonization of custom duties and taxes of equivalent effects at the borders of member states provides an adequate platform for building the common trade policy of ECOWAS.

He said tobacco abuse is responsible for more than 6million deaths per year and has become one of the major challenges of countries globally.

He further said reducing consumption is the most effective way to meet this challenge adding that significant progress has been made in this area by governments and the world including high levels of taxation.

He said the situation in the sub-region shows the lack of use of taxation and the lack of synergy between research, advocacy and policy making in tobacco control. 

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