Stop illicit financial flows to raise more revenue – Lawyer

By on June 24, 2017

A tax lawyer and lecturer, Mr Abdallah Ali-Nakyea, has tasked the government to rid the country of illicit financial flows (IFF).

He also charged Ghanaians to pay their taxes.

He said by stemming IFF, the government would realise the needed revenue and meet the demands of the people for public services.

Mr Ali-Nakyea was speaking at a ceremony to commemorate World Public Services Day.

The event was organised by the Ghana Integrity Initiative (GII), the Tax Justice Network Africa (TJNA) and the Public Services International.

Illicit Financial Flows

Illicit Financial Flows (IFF) refer to money illegally earned, transferred, or utilised. Such monies are usually moved across country borders and originate from corruption, criminal activity and cross-border tax evasion, Mr Ali-Nakyea explained.

He said the cost of fraudulent trade invoicing in five African countries amounted of to $14.4 billion in revenue in a period 10 years up to 2011.

The five countries studied were Ghana, Kenya, Mozambbique, Tanzania and Uganda.

The researchers also found that the countries involved lacked trade, tax and transaction data to curb the illicit flow of monies.

He said over and under-invoicing in the five countries facilitated illegal outflows of more than $60 billion during the 10-year period.


Mr Ali-Nakyea said Ghana, for instance, had more than $14 billion in mis-stated invoices over the entire 10-year period, equivalent to 6.6 per cent of its gross domestic product.

He said the country was replete with laws and institutions to curb the illegality, and it could do this by allowing for institutional tracking. He, however, wondered why the Minerals Commission (MC) was not part of the institutional regime in the country to track IFF as multinational corporations were the culprits in that act.

He said the Swizz Ambassador was reported in the newspapers to have said that his country imported gold amounting to $2 billion from Ghana in 2016.

Mr Ali-Nakyea said statistics and data with the MC should be enough to have supported the assertion and wondered what the data would have revealed, if there were one.

Under the circumstances, he said revenue authorities had to take up what was reported by the Ambassador in the newspapers and match it with data from the MC. Any differences had to be traced to stop the IFF.


Mr Ali-Nakyea said the country had many pieces of legislation to curb the practice.

“You have all the traps in the laws, but you have not been able to catch a mouse…” he said.

In a presentation, the Member of Parliament for Suhum who is also a member of the Network of African Parliamentarians on Illicit Financial Flows and Taxation (UPLIFT), Mr Frederick Opare Ansah, said the Parliamentary Select Committee on Finance had begun discussions with the Bank of Ghana to monitor forex transactions in accordance with Article 184 (1) of the Constitution, but he noted the constitutional prescription had never been undertaken since 1992.

Mr Ansah, who is also the Vice Chair of the Parliamentary Select Committee on Communication, reported having a meeting with some telecommunication operators to look into announcements of some mergers next week.

The Chairman of the Tax Justice Coalition, Ghana, an affiliate of the TJNA, Mr Vitus Azeem, called on the government not to carry out its plans of creating offshore facilities as that encouraged IFF.

The Executive Director of the GII, Mrs Linda Ofori-Kwafo, tasked all when she said, “we have a role to play. If we collect enough taxes, we would have growth and development.”

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