Money Moves March 11, 2021 at 02:00 pm

These are the seven African countries that are havens for millionaires avoiding taxes

Nii Ntreh March 11, 2021 at 02:00 pm

March 11, 2021 at 02:00 pm | Money Moves

Tax havens can be destinations for ill-gotten money which swerves regulators and is laundered as foreign direct investment. Photo Credit: Africanews

The biennial Corporate Tax Haven Index prepared by the non-profit Tax Justice Network (TJN) has been released for 2021 and it features seven African countries among 70 considered as the jurisdictions with the most tax policies.

The increasing internalization of finance means that money has the potential to globetrot in a bid to avoid the queries and prying eyes. Financial technology as well as monetary policies that favor the wealthy continue to make this globetrotting possible for capital.

According to TJN, the index “a ranking of jurisdictions most complicit in helping multinational corporations underpay corporate income tax”. The list is compiled by evaluating national financial systems across the world through a methodology comprising 20 indicators.

The TJN believes tax avoidance, tax evasion, and lenient tax policies constitute abuse because they worsen economic inequalities across the world. Taxation, especially an increment, is often derided by wealthy people and organizations. It is common to see the wealthy constantly fight to lower their taxes or move their monies offshore.

Tax havens also make it easy for criminals to launder money where they can send money from offshore accounts into the desired economy as if it is foreign direct investment (FDI).

In Africa, where poverty is on the decline according to the World Bank, inequality still poses great challenges to the emerging economies. In South Africa, for instance, we see the most unequal economy in the world, even if it is one of Africa’s most developed countries.

As follows are the seven countries in Africa that feature in the 2021 list of havens for millionaires to stash away cash from taxation:

Mauritius

Mauritius, first in Africa, has for long been a favorite offshore destination for tax avoidance. Globally, Mauritius is ranked 15th, ahead of the likes of Germany and Belgium. The country does count on FDI as one of its most lucrative sources of funds.

South Africa

Africa’s second largest economy, South Africa is also one of the most economically unequal countries in the world. It also happens to be a haven for those with the means to stash their cash in Africa, from certain regulators.

Liberia

After years of civil unrest and unforgiving levels of poverty, Liberia has over the last few years set itself on the path of recovery. In this process, a lenient monetary system is thought to be a viable means of raising much needed cash from foreign onvestors.

Seychelles

Seychelles is 49th in the world on this list. But the island nation in the Indian Ocean, which is loved for its ecology, is also one of Africa’s more developed countries. It just so happens some of Seychelles wealth comes from maintaining a lax tax affair.

Botswana

The southern African country of Botswana is a popular tourist destination. It is one of Africa’s more stable countries too. Stability obviously makes it a preferred destination for those stashing away cash.

Ghana

Another stable country that markets itself as the “Gateway to Africa”, Ghana has seen a considerable amount of urbanization in the last decade. It’s financial sector has also been expanded to accommodate FDI, a result of which places the West Africans on this list.

Kenya

Tourism and agriculture continue to be Kenya’s biggest earners. However, the country is also one of the most expansive financial hubs in East Africa. The opportunities Kenya’s system presents leads to the country becoming a tax haven for wealthy individuals and corporations.

Tanzania

Tanzania is the only other mainland East African country in this list. The country is gradually urbanizing due to massive investments in infrastructure and resource development. Some of these funds are raised via a relaxed monetary policy that allow for the country to be a tax haven.

Gambia

Gambia is another West African country that has looked to liberalize its economy and allow for FDI. But for a decade or so, it has been known to international watchdogs as a conduit for ill-gotten money.

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