Africa's potential for tax revenue from untapped sources
2 November 2015
Africa has the potential to raise tax revenue from many untapped sources on the continent. Countries can increase “their focus on larger tax payers, strengthen tax audits, simplify tax systems and modernize collections.”
There are many countries in Africa that do not collect all tax owed to them. These countries collect a small proportion of GDP in tax revenue. These countries could implement solutions to help standardize tax collection, and solutions to decrease tax fraud and evasion. “We estimate that such measures could increase tax revenues by 10 percent in as little as 12 months.”
Countries with more established tax systems could improve tax collection by prioritizing the largest taxpayers, upgrading their IT infrastructure, making use of digital tax collection methodologies and introduce compliance programs. “These measures could increase tax revenues by 5 percent in 12 months.”
Countries with advanced tax collection systems in place could increase tax revenue by improving compliance with “advanced risk analytical engines. Such steps could increase tax revenues by 2-5 percent in 12 months”.
If countries did the above to improve tax collection and compliance, “Africa’s governments could quite feasibly collect up to $50 billion in additional revenues within the next five years”.