AU, ATAF To Deepen Cooperation In Tackling Illicit Financial Flows, Cross Border Tax Evasion

The African Union Commission and the African Tax Administration Forum have agreed to deepen cooperation among African tax authorities to tackle illicit financial flows, cross-border tax evasion and aggressive tax practices.

The two institutions also agreed to strengthen efforts on domestic revenue mobilisation, taxation of extractive industries and other hard-to-tax sectors.

The agreement followed a meeting between an ATAF delegation led by its Council Chair, Johnston Makhubu, and the AUC Commissioner for Economic Development, Trade, Tourism, Industry and Minerals, Francisca Belobe, at the African Union headquarters in Addis Ababa, Ethiopia.

ATAF disclosed this in a statement issued on Friday, saying the discussions focused on African-led measures to improve tax compliance, increase government revenue and support sustainable development.

A major area of focus was the implementation of the agreement on mutual assistance in tax matters, which provides for greater cooperation through the exchange of information, assistance in tax collection and joint tax examinations.

The organisations also identified stronger tax treaty networks as a priority. ATAF said its model double taxation agreement could help African countries negotiate treaties that better protect their taxing rights and reflect their development needs.

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Belobe urged ATAF to deepen engagement with the private sector, noting that greater involvement of businesses in tax policy and compliance discussions could improve voluntary compliance and expand the tax base.

The AUC and ATAF further agreed to sustain cooperation on taxation in extractive industries and other hard-to-tax sectors, where challenges such as complex cross-border transactions, valuation issues and limited access to information often affect revenue collection.

The two institutions are also expected to renew their memorandum of understanding and develop a new work plan covering tax policy and administration, treaty matters, mutual assistance, private-sector engagement and taxation of strategic sectors.