Reforms to improve taxation of multinational enterprises in Africa

Abstract

This policy brief analyses the problems facing Africa related to ‘base erosion and profit shifting’ by multinational corporations. It builds on the Report of the High Level Panel on Illicit Financial Flows (IFFs) from Africa to look beyond that Report’s analysis of how base erosion and profit shifting (BEPS) are carried out in Africa, into specific policies that can be used to prevent such flows. This policy brief is structured around two key messages. The first key message is that African Governments have much to gain from improving taxation of multinational enterprises (MNEs), especially if efforts are substantial, coordinated between public institutions and national stakeholders, and in collaboration with other African countries. The second key message is that it is also advisable to strengthen alliances and advocate for a global tax authority that better accommodates developing country concerns and that supports appropriate reforms in that regard.