– Domelevo
Former Auditor-General of Ghana, Daniel Yaw Domelevo has observed that multinational financial institutions are the major perpetrators of illicit financial flows.
The former Auditor-General speaking at a public forum, organized by the Media Foundation for West Africa in partnership with the Thomson Reuters Foundation, noted that multinational financial institutions deploy many mechanisms such as transfer pricing to aid the illicit flows.
Illicit financial flows (IFF) are the illegal or unethical movement of money or assets across borders to evade taxes, hide wealth, or fund illicit activities such as terrorism. Companies and individuals, through dubious means, manipulate trade prices, smuggle goods, or use corrupt schemes to transfer money out of one country, often to tax havens or secret accounts.
The former Auditor-General noted that this practice is mostly carried out by multinational financial institutions, which use their subsidiaries to engage in such acts. “Multinational Financial Institutions are the major carriers of illicit financial flows through mechanisms like transfer pricing,” he emphasized.
Yaw Domelevo asserted that the act is very prevalent in Ghana causing the state to lose a significant amount of resources in terms of taxes. The significant loss of tax revenues through the illicit flows causes a deficit in the funding for critical development like education, healthcare, and infrastructure.
In addition, the ever-depreciating Ghana cedi, Yaw Domelevo observes is partly linked to the illicit flows. He is therefore calling for more robust measures and mechanisms by the state to curb the menace.
Given this, he said “We must tackle illicit financial flows, as they will otherwise continue to weaken the Ghanaian currency.”
