Finland to strengthen taxation capacity in developing countries with a focus on Africa

Finland to strengthen taxation capacity in developing countries with a focus on Africa

Finland's new Taxation for Development Action Programme aims to strengthen the taxation capacity of developing countries, to ensure tax responsibility of companies that receive development cooperation funds and to make the voices of developing countries heard at international negotiation tables.

Developing countries’ tax systems are often weak. The majority of the labour force and businesses in developing countries operate in an informal economy, outside official tax registers. Additionally, multinational companies’ aggressive tax planning threatens to jeopardise opportunities to generate tax revenues especially in developing countries.

“Because of illicit financial flows and aggressive tax planning, developing countries lose more in tax revenue than they receive in development aid each year. African countries are now taking action to stop these flows and Finland wants to support them in the effort,” says Minister for Development Cooperation and Foreign Trade Ville Skinnari.

Finland will double its funding aimed at the strengthening of developing countries’ taxation capacity by 2022 and will direct support especially to Africa. The focus will be on taxation in order to help poor countries to fund a greater part of their development needs from their own tax revenue.

Finland’s new Taxation for Development Action Programme for 2020-2023 includes three main pillars:

  1. Strengthening the taxation capacity of developing countries
  2. Ensuring the tax responsibility and transparency of companies that receive development cooperation funds
  3. Improving the position of developing countries in global tax policy

Finland will expand its cooperation with the African Tax Administration Forum (ATAF), which is the umbrella organisation for Africa’s tax administrations. The Finnish Tax Administration will continue its cooperation with Tanzania and will expand its cooperation to other African countries. Companies that receive development cooperation funds will be required to submit transparent and country-specific tax reports and financial statements.

Finland will also fund the cooperation of African civil society organisations to promote the equality of taxation. The aim is to bring together government officials, researchers and civil activists to strengthen the culture of taxation in Africa and to defend the common positions of African countries in global tax policy issues. 

Inquiries:
Tiina Vainio, Special Adviser to the Minister, +358 50 524 6559
Kuutti Koski, Communications Coordinator for the Ministry for Foreign Affairs, tel. +358 295 350 206
Max von Bonsdorff, Director of the Unit responsible for the Taxation for Development Action Programme, tel. +358 50 344 1014
Timo Voipio,
Program Director, Taxation for Development, tel. +358 40 778 2954

The email addresses of the Ministry for Foreign Affairs are in the format [email protected]