By Wallace Mawire
African countries have shown strong post-Covid-19 recovery with an average economic growth of about 5 percentage points between 2010 and 2021 periods in countries participating in the African Tax Outlook (ATO) and even stronger revenue collection.
During the same period, tax revenue that was mobilised by these ATO-participating countries was 7.7% higher. This increase could be due to the fiscal stimulus measures that countries deployed to mitigate the pandemic’s impact.
This emerged at the launch of the 2022 African Tax Outlook report – the pre-eminent resource on tax policy and administration in Africa covering 37 African tax administrations – in Sandton, South Africa.
Speaking at the launch, African Tax Administration Forum (ATAF) Deputy Executive Secretary Mary Baine emphasised that the ATO is a key resource for authentic data and emerging trends in taxation on the continent.
“The ATO is ATAF’s flagship publication that affords users the opportunity to have a grasp of the tax architecture on the continent,” she added.
In his opening address, the Vice-Chairman of the ATAF Council and SARS Commissioner, Edward Kieswetter noted that the ATO had become a key reference to those working in tax matters on the continent.
Kieswetter urged the use of the ATO for evidence-based and data-driven analysis: “Our decisions have to be data and evidence-driven.”
The ATO not only provides comparative statistics across 37 African jurisdictions which are critical for benchmarking but also good practices and success stories from African countries that can be utilised to derive quick wins.
Among the findings highlighted in the ATO 2022, are some country-specific impacts. For example, Namibia realised the highest tax-to-GDP ratio in 2020 (33.00%) and 2021 (31.40%) largely due to growth in tax revenue backed by an increase in Southern African Customs Union (SACU) receipts.
Ghana had the highest tax-to-GDP ratio in the ECOWAS region, increasing by 1.57 percentage points from 12.22% in 2020 to 13.80% in 2021, owing to the introduction of a Cashless Tax Payment Policy which allows taxpayers to pay taxes online, at banks and using mobile money.
Côte d’Ivoire had the highest increase in tax-to-GDP ratio expanding by 3.94 percentage points due to higher revenue from Corporate Income Tax (CIT).
The report notes the need to deploy efficiency gains in existing areas, harness new sources of revenues and close revenue leakages to achieve effective domestic revenue mobilisation in Africa. For that reason, the upcoming editions of the African Tax Outlook (ATO) will include statistics on new revenue streams such as environmental taxes, property taxes and High-Net-Worth Individuals; and ATAF underscored its availability to support countries address any revenue gaps.
