Illegal fiscal deals - Ghana has been ranked the third most 'secret' country in Africa where illegal financial transactions thrive and the 44th out of 74 countries, according to the 2011 Financial Secrecy Index (FSI). The research was conducted by a Kenyan-based international non-aligned coalition of researchers and activists called The Tax Justice Network Africa.

The group said its major concern is about the harmful impacts of tax avoidance, tax competition and tax havens.

The FSI 2011 has identified five African countries as secrecy jurisdictions, with Liberia being first followed by Mauritius, Ghana, Botswana, and the Seychelles.

The FSI 2011 reveals that the leading secrecy jurisdictions are the wealthier countries, like the United States of America, United Kingdom, Germany, Japan and Switzerland being ranked first in the world.

The group said the criteria used for the research into illicit financial flows stem are from three major sources, bribery, criminal activity and cross-border tax evasion.

According to the findings, about $11 trillion was held in secrecy jurisdictions in private wealth in 2005, resulting in an annual tax loss of US$255 billion.

The group said between 1970 and 2008, illicit financial flows from Africa amounted to about US$854 billion, which could have satisfied the continent's external debt obligations and left a surplus of US$600 billion to reduce poverty and stimulate economic growth.

"If African governments are serious about improving the livelihoods of the majority of their citizens, then they can no longer afford to continue to lose tax revenue in this manner" the network warned.

The group said it is unlikely that African countries will meet the Millennium Development Goals (MDG) by 2015 and the lives of poor communities will only get worse.

African governments, the group said must support the demands for increased transparency of financial transactions to enable tax administrators to better detect tax dodging in the countries.

Belinda Enyonam Henya

Accra Mail/11/10/2011