The Commission agrees that Illicit Financial Flows, tax evasion and tax avoidance are a major impediment in the effort of increasing Domestic Revenue Mobilisation in Africa, as shown by the report on Illicit Financial Flows from Africa by Thabo Mbeki.
In response to these challenges, the Commission has developed the ‘Collect More — Spend Better’(1) approach. The Commission is committed to supporting African countries to establish efficient, effective, fair and transparent tax systems, to implement international tax standards, and therefore to increase domestic revenue mobilisation and tackle tax evasion, tax avoidance and illicit financial flows. The Commission and several EU Member States have endorsed the Addis Tax Initiative(2).
The Commission collaborates with international development institutions, notably the United Nations, the International Monetary Fund, the World Bank Group and the Organisation for Economic Cooperation and Development, to support developing countries in their efforts to increase Domestic Revenue Mobilisation through capacity development in areas such as reforms to tax policy, tax administration, revenue management from natural resources or taxation of multinational corporations.
In addition, the Commission strongly supports the inclusion of developing countries on an equal footing in the international tax governance domain, notably in the Base Erosion Profit Shifting process.
At regional and national level, the Commission supports and works closely with the Africa Tax Administrative Forum and the IMF-managed Regional Technical Assistance Centres. Reforms in Domestic Revenue Mobilisation are also an important component within the Commission’s budget support operations in African countries.