Zitto na Demokrasia

Zitto na Demokrasia

Posts Tagged ‘Open Government Partnership (OGP)

Foreign aid is not the only African story worth hearing

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Overcoming ‘The Danger of a Single Story’ to Africa’s development discourse

Zitto Kabwe


Foreign aid is not the only African story worth hearing

Chimamanda Adichie, the award-winning Nigerian author, has spoken of the danger of a single story. She writes from a literary perspective, but her warning also applies to talk about development in Africa.

For more than five decades, the development debate has been dominated by a single story: foreign aid. But there is another story – that of illicit financial flows.

However, this story is not rosy, nor is it popular. Information about illicit flows are kept secret and efforts to address the situation are often discouraged. And little wonder – because data shows that illicit money flowing out of the continent is double what it receives in foreign aid.

According to estimates by Global Financial Integrity, a research and advocacy organisation working to curtail illicit financial flows out of developing countries, up to $1.4tn (£870bn) was transferred from Africa over the three decades to 2009. Meanwhile, illicit flows exceeded the continent’s foreign debts. This makes Africa a net creditor to the world.

The curious case of Tanzania further underlines this story. In 2001-11, the east African country’s economy grew an average of 7% a year yet poverty declined by only 2%. The high growth reflects the country’s strengthening mining and service industries, but these have not benefited the poor.

Tax payments by multinationals have been minimal, and existing local sources of jobs, such as small-scale mining, have been suppressed for the benefit of big miners.

While Tanzania exported minerals worth $11.3bn between 2001-11, government revenues were US$440m, just below 4% of the total value of the exports. As a visiting IMF delegate remarked in 2011: “The growing mining sector has little net fiscal impact due to significant losses contributed by tax incentives abuse and structure.”

Of course, there are other challenges that hamper our development, such as corruption and the dominance of the informal economy, which accounts for an estimated 53% of GDP. However, tax evasion and avoidance are key contributors to Tanzania’s development setbacks.

The country loses 5% of its GDP to tax avoidance, 4% to tax exemptions given to multinationals, and almost 3% to evasion of customs duties. Several well-to-do Tanzanians evade tax by shifting their undeclared assets abroad. These assets are sometimes legally obtained, but usually they are acquired corruptly.

In 2012, the Swiss National Bank issued a report that showed Tanzanians held $196m in its institutions. Other unpublished reports indicate this figure could be even higher.

Last week, during an official fact-finding trip, a Swiss banker told me that while Tanzania had been complaining about Switzerland, much more Tanzanian-owned money was being held in London, Jersey, as well as the British Virgin Islands and the Cayman Islands. These are British offshore territories, however secrecy denies us an opportunity to discover the sum being held in these jurisdictions.

Much more money is lost from Africa through tax avoidance by multinationals investing in the continent. They use legal channels to transfer their profits to low-tax areas such as Switzerland, the City of London and the Cayman Islands.

The developed world is also losing resources, through the same mechanisms that are damaging Africa. Consequently, the US and EU have pressured tax havens to share information about the fortunes hidden on their shores, and, as a result, several of the most clandestine jurisdictions, including Switzerland, are preparing to share such information.

Yet my visit to Switzerland revealed a serious problem: the increased co-operation is between, and to the benefit of, developed countries. The rest risk being left in the dark, with no access to information about the financial resources taken from our countries.

We need to change this, and this is how we can start: the developed and developing world must agree to automatic and unconditional exchange of information about tax. Global rules to ensure multinationals report on a country-by-country basis are also vital, to insist they pay the correct amount of tax in each country.

At the same time, African governments must renounce double taxation treaties, which make them surrender tax revenues to developed countries. Instead, they should insist on a global convention on such matters.

Also important is for the UK and other countries in the Open Government Partnership to create public registries of the beneficial owners of companies, trusts and foundations. We cannot talk of open government without opening offshore jurisdictions, and we cannot insist on opening up government data without also opening up the tax havens that impoverish Africa.

Africa must not continue to be a beggar of its own illicitly removed resources, which are returned as aid but with strings attached. Aid to Africa is one story; illicit flows are another, less talked about reason for the continent’s poverty.

Zitto Kabwe MP is chair of the parliamentary public accounts committee in Tanzania, as well as an economist specialising in anti-corruption and campaigner on tax justice



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Zitto aenda Uswiss na Uingereza kuhusu utoroshaji wa fedha

Shirika la Kimataifa la Mtandao wa Ulaya wa Madeni na Maendeleo, European Network on Debt and Development (Eurodad)  watafanya ziara ya kiuchunguzi kuhusu masuala ya uwazi katika kodi katika nchi za Ulaya kuanzia tarehe 20 Oktoba mpaka tarehe 5 Novemba mwaka 2013. Uchunguzi huo utaendeshwa na wataalamu waliobobea wa masuala ya kodi na maendeleo. Mwenyekiti wa Kamati ya Bunge ya Hesabu za Serikali wa Bunge la Tanzania Zitto Zuberi Kabwe ameteuliwa kuongoza Jopo la uchunguzi huo.

Eurodad ni Mtandao wa Mashirika yasiyo ya kiserikali yapatayo 48 kutoka nchi 19 za Ulaya ambayo yanajihusisha na masuala ya kufutia madeni nchi zilizoendelea, misaada yenye maana na kodi za haki. Mashirika haya yamekuwa kwenye kampeni ya kupinga utoroshwaji wa fedha kupitia ukwepaji kodi unaofanywa na mashirika ya kimataifa kwa nchi zinazoendelea. Zitto amekuwa mmoja wa wabunge wanaosimamia hoja ya kutaka Watanzania waliotorosha fedha kwenda nje warejeshe na kufunguliwa mashtaka. Mwaka 2012 aliwasilisha hoja binafsi Bungeni na kupitishwa kuwa Azimio la Bunge ya kutaka uchunguzi kuhusu utoroshwaji wa fedha na kufichwa nje kama Uswiss. Kikosi Kazi cha Serikali kutekeleza Azimio hilo la Bunge kinatarajia kuwasilisha taarifa yake katika Mkutano wa Kumi na Sita wa Bunge. Siku ya Jumatatu tarehe 21 Oktoba Zitto atakutana na Waziri wa Fedha wa Uswiss na maafisa wa mabenki na asasi zisizo za kiserikali zilizopo jijini Geneva. Pia Zitto atahudhuria mkutano wa Kamati ya Kodi ya Umoja wa Mataifa katika kampeni ya kubadili mfumo wa kodi za kimataifa ili kuzuia unyonyaji wa nchi za Kiafrika unaofanywa na Makampuni makubwa ya Kimataifa.

Baada ya Geneva Zitto atatembelea nchi za Luxembourg na Brussels kabla ya kwenda Norway ambapo atamalizia ziara yake kwa Jopo la Wataalamu wa masuala ya kodi na Maendeleo kuandika taarifa maalumu yenye mapendekezo kuhusu kuzuia utoroshaji wa fedha kutoka Afrika.

Zitto atakwenda jijini London kutoa mada kuhusu masuala ya kodi za kimataifa katika mkutano wa Uwazi (Open Government Partnership). Mwenyekiti wa PAC Tanzania atafanya mazungumzo na Mwenyekiti wa PAC Uingereza Bi Margaret Eve Hodge, Lady Hodge MBE, PC, MP  kuhusu masuala mbalimbali ya ushirikiano wa mabunge mawili na kuendeleza wito wake kwa makampuni ya kimataifa kulipa kodi zao barani Afrika na kuacha tabia ya kutumia ‘Tax Havens’ kukwepa kodi na kufukarisha nchi za Kiafrika.

Zitto invited to annual OGP Summit

The Kigoma North Member of Parliament and Chairman of the Public Accounts Committee (PAC), Hon Zitto Kabwe has been invited for the annual Open Government Partnership (OGP) Forum which kicks off in London at the end of the month.

The OGP Summit is a chance to promote tax and illicit issues to new audiences, to encourage new commitments in country action plans.

Hon Zitto, who also serves as Deputy Leader of Official Opposition in the Parliament, will serve in the panel which will discuss tax and illicit flows, which is among themes to be deliberated during the summit.

The OGP is a global platform for domestic reformers committed to making their governments more open, accountable, and responsive to citizens. Tanzania is among countries which have signed its membership to the OGP.

Hon Zitto has great interest on tax avoidance through illicit transfers and last year he tabled private motions which lead to the adoption of a Parliament Resolution compelling the government to investigate a number of individuals who have illicitly stashed billions of dollars abroad.

The fact finding mission will see its members interact with UN Tax Committee, OECD, EU as well as key European governments. They will visit a number of European cities namely Geneva, Paris, Luxembourg, Brussels and Oslo.


Issued by;

Parliamentary Office of Hon. Zitto Kabwe MP

Dar es Salaam

October 19, 2013