Gabon has joined international efforts to end tax avoidance and evasion by signing the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

Gabon has joined international efforts to end tax avoidance and evasion by signing the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, making it the seventh African country to sign the convention since it was opened for signature to all countries in June 2011.

Currently over 60 countries have signed the convention and it has been extended to over 10 jurisdictions, including all G20 countries, all BRICS, almost all Organisation for Economic Co-operation and Development countries, major financial centres and a growing number of developing countries.

The convention provides for all forms of mutual assistance: exchange on request, spontaneous exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection, while protecting taxpayers’ rights. It also provides the option to undertake automatic exchange, requiring an agreement between the Parties interested in adopting this form of assistance.

The convention was developed jointly by the OECD and the Council of Europe in 1988 and amended by protocol in 2010 to align it to the international standard on exchange of information on request and to open it to all countries, in particular to ensure that developing countries could benefit from the new, more transparent environment. The amended convention was opened for signature on 1 June 2011.

“Already a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes since October 2012, Gabon’s commitment today plays an important role for regional co-operation in tax matters and demonstrates effective action towards greater exchange of information,” said Pascal Saint-Amans director of the OECD’s centre for tax policy and administration.

“We hope it will act as an encouragement to other African and developing countries to also join this important area of international co-operation in the fight for a fairer and more transparent international tax system,” he added.

Offshore tax evasion remains a serious problem for countries and jurisdictions worldwide, with vast amounts of funds deposited abroad and sheltered from taxation when taxpayers fail to comply with obligations in their home countries.

Following the global financial crisis, governments in Europe and the US have made it a key priority to increase transparency and crack down on tax evasion and secrecy.

Setting the standard for global tax transparency has been the Foreign Account Tax Compliance Act, which was rolled out by the US on 1 July and requires all financial institutions outside of the US to regularly submit information on financial accounts held by US persons to the Internal Revenue Service. Those who are not compliant will suffer a 30 per cent withholding tax on income and gross proceeds.