‘Most African countries do not have freedom of information’

There are many ways of evading taxes: transfer mispricing, false invoicing and tax fraud. Karuturi, based on the public information available, was found have transferred their products when in actuality was selling it locally but using false invoices to evade taxes.

The impression we have is what Karuturi has created. And it is not a very good one since they are now seen to be tax evaders (a criminal offence). In addition their continual failure to pay workers based on the newspaper reports show that they do not respect the laws of the country they are investing in.

From a tax perspective there is no information available on the contracts that are signed with companies as most African countries do not have freedom of information and even when if they do these contracts are confidential.

There is a need to review and revamp the current international tax law rules and to ensure that there is a fair share of resources spread around the world. This can be done through provisions such as: country by country reporting of all profits so that tax authorities know where profits are created and therefore taxed. Automatic exchange of information between tax authorities to ensure false reporting is not taking place in different countries. Beneficial ownership where the actual owner is known in the records and people do not hide behind companies and trusts. Unitary taxation where a share of formula is agreed upon by the states where companies are operating and finally an international tax organisation for all states which would be the best way to decide on these issues and not in organisations that do not allow equal representation of all states.