The Hunger Games: How DFID Support for Agribusiness is Fuelling Poverty in Africa

The Hunger Games: How DFID Support for Agribusiness is Fuelling Poverty in Africa

Report for War on Want (December 2012)

This report shows that hundreds of millions of pounds of British taxpayers’ money is being used to promote projects designed to benefit some of the world’s richest agribusiness corporations and to extend their control over the global food system. DFID is at the centre of an intricate nexus of corporations and donor-sponsored institutions seeking to maximise private profit from agriculture. Personal connections play a vital role, and there is a significant ‘revolving door’ of staff between DFID and agribusiness corporations, with the personal links going beyond DFID to the heart of the UK government and its economic policy. In addition, this report reveals DFID’s involvement in a network of private enterprises and investment fund managers incorporated in the secrecy jurisdiction of Mauritius.

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Tax Incentives and Revenue Losses in Kenya

Tax Incentives and Revenue Losses in Kenya

Report for Tax Justice Network-Africa and ActionAid-International (June 2012)

The government of Kenya is providing a wide range of tax incentives to businesses to attract greater levels of Foreign Direct Investment (FDI) into the country. Yet this study shows that such tax incentives are leading to very large revenue losses and are anyway not needed to attract FDI. Recent government estimates are that Kenya is losing over KShs 100 billion (US$ 1.1 billion) a year from tax incentives and exemptions. Of these, trade-related tax incentives were at least KShs 12 billion (US$ 133 million) in 2007/08 and may have been as high as US$ 566.9 million. Thus the country is being deprived of badly-needed resources to reduce poverty and improve the general welfare of the population. In 2010/11, the government spent more than twice the amount on providing tax incentives (using the figure of KShs 100 billion) than on the country’s health budget – a serious situation when 46% of Kenya’s 40 million people live in poverty (less than US$ 1.25 a day).

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The One Billion Dollar Question: How Can Tanzania Stop Losing So Much Tax Revenue

The One Billion Dollar Question: How Can Tanzania Stop Losing So Much Tax Revenue

Report for Norwegian Church Aid and Churches in Tanzania (June 2012)

This report analyses Tanzania’s tax policies and how much revenue the country is losing from tax evasion, capital flight and tax incentives. It shows that, every year, a vast amount of potential tax revenue that could be used to reduce poverty is failing to end up in the government treasury; much is simply leaving the country. Illicit financial flows from Tanzania – which entail the disguised expatriation of money abroad, usually to developed countries or tax havens – range from $94 – 660 million a year. In total, and including further revenue losses from tax incentives and various forms of tax evasion, the report estimates that Tanzania has in recent years been losing revenues ranging from $847 million – $1.29 billion (TShs 1.35 – 2.05 trillion) a year – thus the median figure is $1.07 billion (TShs 1.7 trillion).

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Tax Incentives and Revenue Losses in Tanzania

Tax Incentives and Revenue Losses in Tanzania

Report for Tax Justice Network-Africa and ActionAid-International (June 2012)

The government of Tanzania is providing a wide range of tax incentives to businesses to attract greater levels of Foreign Direct Investment (FDI) into the country. This study shows that such tax incentives are leading to very large revenue losses and may not be needed to attract and retain FDI. The report shows that, taking different estimates into account, revenue losses from all tax exemptions and incentives may be as high as TShs 1.8 trillion (US$ 1.23 billion) in 2008 and that the minimum revenue loss from tax incentives granted to companies alone is around TShs 381 billion ($174 million) a year (for the years 2008/09 – 2009/10). Thus Tanzania is being deprived of badly-needed financial resources for financing public expenditure of goods and services. If the public revenue lost through tax incentives were spent on education and health, the education budget would increase by more than a fifth and the health budget by more than two-fifths.

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Tax Incentives and Revenue Losses in Uganda

Tax Incentives and Revenue Losses in Uganda

Report for Tax Justice Network-Africa and ActionAid-International (April 2012)

The government of Uganda is providing a wide range of tax incentives to businesses to attract greater levels of Foreign Direct Investment into the country. Yet this study shows that such tax incentives are leading to very large revenue losses and are anyway not needed to attract FDI. Losses from tax incentives and exemptions amounted to around UShs 690 billion (US$ 272 million) in 2009/10 – nearly twice Uganda’s entire health budget.

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Tax Competition in East Africa: A Race to the Bottom?

Tax Competition in East Africa: A Race to the Bottom?

Report for Tax Justice Network-Africa and ActionAid-International (April 2012)

Governments in East Africa are providing a wide range of tax incentives to businesses to attract greater levels of Foreign Direct Investment into their countries. Such incentives include corporate income tax holidays, notably in Export Processing Zones, and reductions from the standard rate for taxes such as import duties and VAT. Yet this study, which focuses on Kenya, Uganda, Tanzania and Rwanda, shows that such tax incentives are leading to very large revenue losses for governments, are promoting harmful tax competition in the region, and are anyway not needed to attract FDI. In total, Kenya, Uganda, Tanzania and Rwanda are losing up to $2.8 billion a year from all tax incentives and exemptions. Not all these exemptions are bad, since some – such as VAT reductions – can help the poor. But much of the revenue loss is explained by tax incentives provided unnecessarily to attract foreign investment. These revenue losses are depriving countries of critical resources needed for reducing poverty.

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The Role of Transparent and Fair Taxation in Converting Africa’s Mineral Wealth into Development

The Role of Transparent and Fair Taxation in Converting Africa’s Mineral Wealth into Development

Article for Proparco, Groupe Agence Francaise de Developpement (January 2011)

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The mining industry does not contribute enough to Africa ’s development – when it does not make local populations poorer and destroy the environment. Its fiscal regime needs to be overhauled, with a greater share of revenues transferred to governments. Fiscal transparency must also be made mandatory; the sums paid by mining companies, the revenues received by governments and the expenditure made must be published. Finally, international standards, backed up by local legal tools, could revolutionize the sector tax system.

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Sierra Leone at the Crossroads: Seizing the Chance to Benefit from Mining

Sierra Leone at the Crossroads: Seizing the Chance to Benefit from Mining

Report for National Advocacy Coalition on Extractives, Sierra Leone (March 2009)

This report shows how the people of Sierra Leone could benefit more from the country’s mineral resources, which account for 90 per cent of exports but only $9-10 million in government revenues. It shows how mining tax laws have given away too much to companies while government policies to regulate the mining sector are poor or non-existent. Includes case studies of the two largest foreign investors, Sierra Rutile and Koidu Holdings.

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Mining and Tax in South Africa: Costs and Benefits

Mining and Tax in South Africa: Costs and Benefits

Report for African NGOs (February 2009)

This report shows that while mining contributes significantly to the South African economy, the generous tax treatment given to companies means that it does not benefit as much as it could. The costs of mining are borne by poor communities in rural areas. A new royalty system introduced by the government will see the government lose up to $499 million a year compared to previous proposals.

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A Golden Opportunity: How Tanzania is Failing to Benefit from Gold Mining

A Golden Opportunity: How Tanzania is Failing to Benefit from Gold Mining

Report for Tanzanian NGOs (October 2008)

This report is an analysis of gold mining and tax payments in Tanzania. Although Tanzania is one of Africa’s largest gold exporters, ordinary people benefit little, since the government has implemented tax laws that are overly favourable to mining companies and because of the policies of those companies themselves, notably AngloGold Ashanti and Barrick.

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