Tax evasion in Africa and development aid

A newly issued report by the International Consortium of Investigative Journalists, the Mauritius Leaks shows how tax evasion affects the emerging African economies.

Photo by Adeolu Eletu on Unsplash

Indeed, Mauritius has become a kind of Luxembourg of Africa, on the "gray list" of tax havens established by the European Union (EU). This of course to the detriment of the economies of the African continent thereby weakened by the evaporation of tax incomes. Mauritius, with a GDP of $ 26 billion, is expanding services and innovations to appeal to businesses around the world. Their assets on the island today are valued at over $ 630 billion. Thanks to this possibly, Mauritius gloriously comes 2nd in “The 2019 Africa SDG Index”, which ranks 52 African countries based on 97 indicators across all 17 Sustainable Development Goals. The OECD estimates that tax evasion, as well as optimization, cause Africa to lose $ 50 billion annually. Perhaps double, according to the United Nations Economic Commission for Africa, which in this case would be more than the entire development aid to the continent.

45 countries, including 15 in sub-Saharan Africa, have ratified unbalanced double taxation treaties, knowing that corporate taxes in Mauritius range between 0% and 3%. In Senegal, where the Mangrove Foundation supports a long-standing project, the President Macky Sall demanded to rediscuss his treaty responsible for tax losses estimated by his administration to about $ 257 million in the last 27 years. The country has announced the start of oil well operations starting in 2022, and President Sall wants to avoid the excesses of corruption - the first such scandal recently involved his younger brother - and prevent the agreement with Mauritius to swallow the expected mass of petrodollars.

Abundant examples are cited, of corporations or people, including the virtuous Bob Geldof, deriving a shameful profit from these mechanisms, obviously at the expense of what investors designate publicly as the "continent of the future" whose symbol of success is indeed for some represented by Mauritius.