Sub-Saharan tax avoidance concerns flagged

Sub-Saharan African countries are losing as much as $730m a year due to tax avoidance strategies being implemented by multinational companies. That’s according to the IMF which urged these countries to implement targeted policy actions to reduce profit-shifting in the mining sector and avoid losses in corporate income tax revenue. City Press reports that the IMF’s Southern Africa II deputy division chief Giorgia Albertin said sub-Saharan Africa was estimated to possess 30% of global mineral reserves, representing a major opportunity for the region. ‘Despite the high level of private investment in this critical sector, new analysis finds that many multinational companies are avoiding paying their taxes,’ said Albertin. She said revenues were being reduced in two ways. First, countries were trying to attract inbound investment by lowering taxes, ‘which has stoked unhealthy regional tax competition’. Second, international profit-shifting by multinational companies had reduced the tax base in producing countries.