The G-20 Tax Agenda and Africa’s Taxation Needs

The document analyzes the challenges of low tax bases in Africa, driven by factors such as tax avoidance by multinational corporations, over-generous fiscal incentives, and illicit capital flight. It evaluates the G-20/OECD BEPS project as a mechanism to close international tax loopholes and ensure profits are taxed where economic activity occurs. The author argues that while BEPS is a step in the right direction, African countries are under-represented in the process and must strengthen their voice through the UN Tax Committee and the African Tax Administration Forum (ATAF) to ensure outcomes are equitable.

• African countries generally have low tax revenue bases, averaging 13% of GDP compared to 35% in OECD countries. Increasing this to 20% of GDP is identified as a threshold necessary to combat hunger and achieve the UN's Millennium Development Goals.
• Significant revenue is lost in Africa due to tax incentives and exemptions, often granted to Multinational Enterprises (MNEs) without proper cost-benefit analysis. In Ghana, these provisions resulted in a loss of 6.13% of GDP, while Kenya, Uganda, Tanzania, and Rwanda lose up to $2.8 billion annually.
• Illicit capital flight is a major constraint to African development, with estimated annual unrecorded flows between $1.26 trillion and $1.44 trillion. In 33 sub-Saharan countries, an estimated $814 billion was lost between 1970 and 2010.
• The OECD/G-20 BEPS project aims to address 'double non-taxation' and ensure profits are taxed in countries where the actual economic activities and value creation occur. The project consists of 15 action plans, with seven approved as of September 2014, covering areas such as the digital economy, transfer pricing, and corporate secrecy.
• Case studies illustrate how aggressive tax strategies erode African revenue: in Mozambique, the Pande Temane gas project generated less than $50 million in government revenue over eight years despite annual sales to South Africa exceeding $800 million. In South Africa, Lonmin shifted $160 million in commission fees and $155 million in management fees to a subsidiary in the tax haven of Bermuda between 2008 and 2012.
• Africa is under-represented in the institutions leading the BEPS project, as the OECD has no African members and only South Africa is part of the G-20. To benefit, African countries should empower the UN Tax Committee and the African Tax Administration Forum (ATAF) to shape international tax rules.

APA

Fundira, T. (2015). The G-20 Tax Agenda and Africa’s Taxation Needs. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2015/04/Occasional-Paper-216.pdf

Chicago

Fundira, Taku. The G-20 Tax Agenda and Africa’s Taxation Needs. South African Institute of International Affairs, 2015. https://saiia.org.za/wp-content/uploads/2015/04/Occasional-Paper-216.pdf.

Wikipedia

{{cite report |last1=Fundira |first1=Taku |title=The G-20 Tax Agenda and Africa’s Taxation Needs |publisher=South African Institute of International Affairs |date=April 2015 |url=https://saiia.org.za/wp-content/uploads/2015/04/Occasional-Paper-216.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fundira2015g20, author = {Fundira, Taku}, title = {{The G-20 Tax Agenda and Africa’s Taxation Needs}}, institution = {South African Institute of International Affairs}, year = {2015}, month = apr, url = {https://saiia.org.za/wp-content/uploads/2015/04/Occasional-Paper-216.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }