For Ghana to effectively tackle the challenge of Illicit Financial Flows (IFFs), it is essential to strengthen the implementation and governance surrounding Act 967—the Standard for the Automatic Exchange of Financial Account Information.
This legislative measure, which facilitates the automatic exchange of financial information between countries, is a powerful tool in the fight against tax evasion and other forms of illicit financial activity.
According to Nii Addo, Tax Policy Analyst and Executive Director of Green Tax Youth Africa, enhancing the implementation of Act 967 is critical for the country’s economic stability and long-term development.
Illicit financial flows have a significant impact on Ghana’s economy, draining resources that could otherwise be used to fund vital public services and development projects. These flows, including tax evasion and the use of offshore tax havens, are estimated to cost countries billions of dollars annually. For Ghana, addressing IFFs is not just an issue of tax revenue; it is a matter of national economic growth and the ability to support infrastructure, healthcare, education, and other essential services, according to Mr. Addo.
The Automatic Exchange of Financial Account Information standard under Act 967 is designed to create transparency by requiring financial institutions to report the financial holdings of non-resident individuals and entities to tax authorities. This enables Ghana to access information on citizens and corporations that may be hiding assets abroad to avoid taxes. However, this is only effective if the law is well-implemented and supported by robust oversight mechanisms.
Mr. Addo emphasized that without effective enforcement, the law’s potential to reduce IFFs and boost domestic revenue would be limited.
The impact of IFFs on Ghana cannot be underestimated. A study by the Tax Justice Network has shown that developing countries lose an estimated $480 billion annually due to tax abuse and illicit financial flows. For Ghana, strengthening Act 967 could help curb this loss and redirect vital funds into the economy to support development and reduce reliance on external borrowing.
“GRA has set up a desk called the Automatic Exchange Desk. This unit is crucial for tracking information at both the international and national levels to reconcile trade data. Whatever discrepancies are found, the government should address them and hold those responsible accountable,” Mr. Addo explained.
He shared these insights during a two-day capacity-building workshop for journalists in the Upper East Region on IFFs in Ghana. The event was organized by the Media Foundation for West Africa (MFWA) with funding from Oxfam in Ghana and the Ministry of Foreign Affairs of Denmark.
William Nlanjerboh Jalulah, Programmes Manager at MFWA, highlighted the importance of the training, noting the financial and economic impact of IFFs on the world, and especially on developing economies like Ghana.
“As part of the United Nations’ Agenda 2030, all member states are required to address illicit financial flows. As an organization that works with the media, we believe building the capacity of journalists is essential for reporting on these critical issues,” he said.
The Media Foundation for West Africa plans to replicate similar training sessions for journalists across the country.
In addition to training journalists, the foundation has initiated a series of forums to draw national attention to the impact of IFFs. On Tuesday, December 3, 2024, former Auditor-General Daniel Yaw Domelovo spoke at the first forum, which focused on “Curbing Illicit Financial Flows in Ghana.”
Source: A1Radioonline.Com | 101.1MHz | Mark Kwasi Ahumah Smith | Bolgatanga
