OECD – Release of Revenue Statistics in Africa 2019

The average tax-to-GDP ratio for the 26 countries participating in the new edition of Revenue Statistics in Africa was unchanged at 17.2{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} for the third consecutive year in 2017. This was lower than the averages for Latin America and the Caribbean (LAC) at 22.8{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} and for the OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve... at 34.2{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}, underlining the need for urgent action to enhance domestic revenue mobilisation in Africa.

The 26 countries covered in Revenue Statistics in Africa 2019, released today in Tunis at the African Union’s 13^thSession of the Committee of Directors-General of National Statistics Offices, represent nearly three-quarters of Africa’s GDP. The report shows that tax-to-GDP ratios varied widely across these countries in 2017, ranging from 5.7{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} in Nigeria to 31.5{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} in the Seychelles. This fourth edition has grown from 21 to 26 countries and includes Equatorial Guinea, Madagascar, Mauritania, Nigeria and the Seychelles for the first time.

While tax revenues plateaued as a percentage of GDP for the Africa (26) in 2017, non-tax revenues (primarily rents and royalties from natural resources, as well as grants) continued to decline and were lower than tax revenues in all but three of the 26 countries: Botswana, the Republic of the Congo and Equatorial Guinea. Between 2010 and 2017, an increase in tax revenues equivalent to 1.9{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} of GDP on average was offset by a decline in non-tax revenues from 7.5{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} of GDP to 5.7{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} of GDP.

African economies continue to rely heavily on taxes on goods and services, which accounted for 53.7{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} of total tax revenues across the 26 countries. Within this category, value-added taxes (VAT) accounted for 29.4{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} of total tax revenues. Meanwhile, corporate income taxes (CIT) generated 18.6{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} of total tax revenues – a higher proportion than in LAC and in the OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve... – and were equivalent to 2.8{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} of GDP in 2017. This is the same level as in 2016, halting the decline in CIT as a percentage of GDP since 2013.

Overall, the tax structure across participating countries has evolved over the past decade, with VAT and personal income taxIncome Tax is a direct levy imposed by governments on the income generated by individuals, corporations, and other entities within a specific jurisdiction. It serves as a major source of revenue for governments and funds various public expenditures, such as infrastructure projects, healthcare, education, national security, and welfare programs. The tax is generally calculated as a percentage of the taxable... (PIT) accounting for a higher proportion of revenue generation in 2017 relative to 2008, on average. However, PIT (15.4{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} of total tax revenues) and social security contributions (8.1{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} of total tax revenues) remain low in Africa. Reforms to broaden the personal tax baseThe tax base is a fundamental concept in taxation, representing the total amount of economic activity or assets upon which a tax is levied. It is the foundation upon which governments calculate the amount of tax owed, based on factors like income, property value, sales, or corporate profits. Understanding the tax base is essential for tax professionals, businesses, and policymakers,..., remove harmful and regressive subsidies, and expand social insurance coverage can assist in domestic resource mobilisation efforts while contributing to inclusive growth.

Enhancing the efficiency of VAT systems can also provide higher and more sustainable revenues, and improve distributional or environmental outcomes. Environmental taxes are found to represent a small but increasing share of tax revenues in Africa and can have an important role in raising revenues and encouraging the transition to a low-carbon economy. Property taxes are shown to be much lower in Africa than in LAC and in the OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve... but have the potential to play a key role in funding better local services. Equally, improvements in governance and spending may also lead to higher revenues by improving tax morale and making citizens more willing to pay taxes.

A special feature assesses the potential impact of the African Continental Free Trade Area (AfCFTA) on the level and structure of tax revenues, drawing on the detailed data on these revenues in this report. While AfCFTA is likely to strengthen Africa’s economic growth and increase tax revenues in the medium-to-long term, the elimination of taxes on trade within the region will likely reduce revenues in the short term. Trade taxes accounted for 11.8{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} of total taxation on average in 2017 across the 26 countries in this report.  Low-income and least developed countries in the region tend to rely more on trade taxes and are more vulnerable to the short-term impact of reduced trade taxes, underlining the importance of the flexibility mechanisms envisaged by the AfCFTA.

Revenue Statistics in Africa is a joint initiative between the African Tax AdministrationTax authorities are fundamental institutions within government frameworks, overseeing tax assessment, collection, and administration. Their operations ensure that tax laws are enforced and public funds are collected efficiently. This article delves into tax authorities' purpose, responsibilities, and structure, offering insights into their essential role in supporting government functions and economic stability. What is a Tax Authority? A tax authority is... Forum (ATAF), the African Union Commission (AUC) and the Organisation for Economic Co-operation and DevelopmentThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve... (OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve...) and its Development Centre, with the technical support of the African Development Bank (AfDB), the World Customs Organisation (WCO) and the Cercle de Réflexion et d’Échange des Dirigeants des Administrations fiscales (CREDAF) and the financial support of the European Union.

Revenue Statistics in Africa is jointly undertaken by the OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve... Centre for Tax Policy and Administration and the OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve... Development Centre, the African Union Commission (AUC) and the African Tax AdministrationTax authorities are fundamental institutions within government frameworks, overseeing tax assessment, collection, and administration. Their operations ensure that tax laws are enforced and public funds are collected efficiently. This article delves into tax authorities' purpose, responsibilities, and structure, offering insights into their essential role in supporting government functions and economic stability. What is a Tax Authority? A tax authority is... Forum (ATAF) with the financial support of the European Union. It compiles comparable tax revenueTax Revenue is the income collected by governments through various taxes imposed on individuals, corporations, and transactions. It is a primary source of funding for public expenditures, including infrastructure, healthcare, education, and social services. Tax revenue can come from different types of taxes, such as income tax, corporate tax, value-added tax (VAT), excise duties, and customs tariffs. The level and... and non-tax revenue statistics for 26 countries in Africa: Botswana, Burkina Faso, Cabo Verde, Cameroon, Republic of the Congo, Democratic Republic of the Congo, Côte d’Ivoire, Egypt, Equatorial Guinea, Eswatini, Ghana, Kenya, Madagascar, Mali, Mauritania, Mauritius, Morocco, Niger, Nigeria, Rwanda, Senegal, Seychelles, South Africa, Togo, Tunisia and Uganda. The model is the OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve... Revenue Statistics database which is a fundamental reference, backed by a well-established methodology, for OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve... member countries. Extending the OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve... methodology to African countries enables comparisons about tax levels and tax structures on a consistent basis, both among African economies and with OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve..., Latin American, Caribbean, Asian and Pacific economies.