Ghana and other African countries have been advised to fight illicit financial flows (IFFs) to protect the financial integrity of the African Continental Free Trade Agreement (AfCFTA).
This, according to tax experts and authorities, was also critical in dealing with short term tax revenue losses occasioned by the implementation of the Agreement.
It was contained in a communique issued in Accra yesterday following the conclusion of the 7th African Tax Administration Forum (ATAF) – African Tax Research Network (ATRN) Congress organised in partnership with the Ghana Revenue Authority.
The three-day forum was on the theme, “The Tax and Revenue Implications of the AfCFTA.”
It brought together 230 participants; ministries of finance, African tax administrations, the African Union Commission, the AfCFTA Secretariat, civil society, academia, among others from 32 African countries.
The experts called on member countries, African Union and the AfCFTA Secretariat to prepare a strategy for rapid harmonisation, regional inter-agency co-operation and identification of capacity to be able to clamp down on IFFs.
The communique stated that Regional Economic Communities were the building blocks of the African Economic Community and has an important role to play in the implementation of the AfCFTA and trade facilitation programmes.
To this end, it said there was the need to strengthen inter-agency collaboration, ensure the inclusion of technology in all trade and transport projects, consult with all stakeholders and harmonise policies.
The communique further urged for the strengthening of trade governance and relevant institution, development of regional value chains to ensure no country felt left behind in the integration process and institutionalisation of public-private dialogue on regional integration issues.
It noted that although there would be expected marginal tariff revenue losses in the short term following the rollout of AfCFTA, it would increase overall income and welfare for most African countries in the long term.
“The long-term benefits of the AfCFTA, including lowering trade costs, promoting regional value chains and providing consumers with greater variety, may balance out the short-term losses.
It is expected that growth in GDP and consumption will positively impact on the performance of domestic taxes,” the communique stated.
The opportunities for trade and investment, it said, required capacity building at both the technical and infrastructural levels, as well as greater co-operation at the regional level for the successful implementation of trade facilitation measures.
“At the national level, short term losses could be minimised through various measures including a rationalisation of tax incentive regimes, improving efficiencies within tax administration through the use of technology, intensifying the fight against illicit financial flows, and broadening the tax base,” the communiqueadded.
BY CLAUDE NYARKO ADAMS