Author: Emmanual Onyango
Date: January 23, 2007
Source: Kenya Times http://www.timesnews.co.ke/23jan07/nwsstory/news13.html

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Activists participating in the ongoing World Social Forum (WSF) yesterday disclosed incriminating statistics on how the Bretton Woods institutions have been assisting multinational corporations operating in Africa to evade significant amounts of tax.

The activists revealed of how the World Bank and the International Monetary Fund (IMF) have been armtwisting African Governments into maintaining favourable tax environment for foreign investors and multinational corporations, but simultaneously proposing an increase in taxes to local investors.

“The multinationals operating in Africa do not pay taxes but instead get tax subsidies and tax incentives from the African Governments. The poor Africans are left to bear the brunt of heavy tax burden,” said John Christensen, director of the Tax Justice Network.

Though no amount of cumulative tax evasion was given, the activists estimate it to be almost ten times the budget of most African states. Estimates from the African Union estimated that US$146 billion leaves the continent every year through corruption and tax evasion.

“For every one dollar coming to Africa, ten dollars are illicitly being taken into secret companies and personal holdings in the developed countries by the multinationals,” Christensen observed.

A report from the International Tax Justice Networks stated that “major multinational corporations use their international structure to avoid paying taxes on their African operations. In some cases, such activities involve fraud and money laundering.”