Between 2015 and 2019, Uganda raised US$ 25 million (about 92.5 billion) in additional revenue from tax cases as a result of exchange of information, according to Global Forum on Transparency and Exchange of Information for Tax Purposes.
In its 1oth anniversary report, the Forum says Uganda realised the additional revenue having sent 61 requests to its treaty partners.
“Thanks to the successful implementation of its Exchange of Information (EOI) strategy, Uganda attained a “Largely Compliant” rating in its 2016 EOIR peer review and is a well-regarded EOI partner in the region and globally. Uganda now makes routine use of exchange of information as a tool to protect its tax base,” the report says.
The report says Uganda, a resource-rich developing country, faced challenges early in the decade in ensuring the transparency of its taxpayers’ cross border activities. It says in 2014, Uganda had a limited network of exchange of information agreements, undeveloped relations with partner competent authorities, and made little use of exchange of information. “It also did not have a central exchange of information processing function, which caused delays in making and processing requests.”
The Ugandan authorities embarked on a strategy of becoming a visible player in the global tax transparency community and making greater use of exchange of information in its tax compliance programme.
A cross-government working committee was established to address the challenges by engaging with key international associations, including the Global Forum and its Africa Initiative targets; expanding the exchange of information network; and working with the Global Forum, ATAF and the German GIZ on a capacity building programme.
“This included establishing a well-functioning exchange of information team and processes, bringing the multilateral Convention into force (allowing an increased treaty network), and actively promoting tax transparency within the East African Community and within Africa more broadly.”
Over 250 000 requests for information have been received by Global Forum members in ten years and annual figures are almost universally on the rise. Some requests concern thousands of taxpayers, and the amounts of tax collected are increasing. The exchange of information on request (EOIR) alone has enabled the recovery of nearly EUR 7.5 billion of additional tax revenue.
It adds: “Voluntary disclosure programmes and offshore tax investigations have already helped to identify about EUR 102 billion in additional revenue (tax, interest, penalties) and more is to come.”
The report notes that in 2009, the network of agreements was extremely limited and tax evaders were able to exploit situations where there was no agreement in place between particular jurisdictions.
Today, it says, the multilateral Convention ensures an impressive international network, equivalent to nearly 8 000 bilateral agreements. Information relevant for tax purposes can be obtained from about 130 other jurisdictions, including all G20 and The Organisation for Economic Co-operation and Development (OECD) countries, practically all international financial centres (IFCs), and an increasing number of developing countries, by joining a single instrument.
In 2009, the G20 Leaders declared that “the era of banking secrecy is over”. The Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) was called on to deliver this result. “Ten years on, the Global Forum has nearly 160 member jurisdictions and has achieved massive progress in implementing the international tax transparency and exchange of information standards.
With the strong backing of the G20 and the Organisation for Economic Co-operation and Development (OECD), the Global Forum has produced the most impactful international project against offshore tax evasion in history.”