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Tax Base Erosion and Profit Shifting in Africa – Part 1: Africa’s Response to the OECD BEPS Action Plan

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  • Oguttu, Annet Wanyana

Abstract

This paper considers what Africa’s response should be to the OECD’s base erosion and profit shifting (BEPS) project. The paper acknowledges that BEPS concerns for developing countries (such as those in Africa) may not necessarily be the same as those for developed countries. The author first explains the concepts of tax avoidance and tax planning, to describe the background to BEPS. An explanation is given of the causes of BEPS, the challenges BEPS poses to corporate tax systems, the importance of corporate taxes in Africa, and the factors that exacerbate BEPS in Africa. The paper also differentiates BEPS from the notion of illicit financial flows – a matter that is causing a lot of confusion to the general public in understanding BEPS issues, and to finding solutions to the problem of capital flight from Africa. Thereafter the author addresses the relevance of the OECD BEPS Project to Africa, the international initiatives that could benefit Africa in curtailing BEPS, and what Africa’s response should be.

Suggested Citation

  • Oguttu, Annet Wanyana, 2016. "Tax Base Erosion and Profit Shifting in Africa – Part 1: Africa’s Response to the OECD BEPS Action Plan," Working Papers 12802, Institute of Development Studies, International Centre for Tax and Development.
    • Handle: RePEc:idq:ictduk:12802
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    File URL: https://opendocs.ids.ac.uk/opendocs/handle/20.500.12413/12802
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    References listed on IDEAS

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    1. Warwick J. McKibbin & Andrew Stoeckel, 2010. "The Global Financial Crisis: Causes and Consequences," Asian Economic Papers, MIT Press, vol. 9(1), pages 54-86, Winter/Sp.
    2. Léonce Ndikumana & James Boyce, 2010. "Measurement of Capital Flight: Methodology and Results for Sub-Saharan African Countries," African Development Review, African Development Bank, vol. 22(4), pages 471-481.
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    Cited by:

    1. Favourate Y. Mpofu, 2022. "Taxation of the Digital Economy and Direct Digital Service Taxes: Opportunities, Challenges, and Implications for African Countries," Economies, MDPI, vol. 10(9), pages 1-28, September.
    2. Ma Caichen & Shan Miao, 2018. "Research on tax risks in the development of the New Silk Road," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 4(3), pages 250-265.

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