African Tax Resilience Amid Global Shocks: ATAF Report Highlights Growth
The ATAF invites tax administrators, policymakers, and other stakeholders to explore the publication for informed decision-making and improved revenue collection.
PRETORIA, South Africa — The African Tax Administration Forum (ATAF) released its 2023 African Tax Outlook on Wednesday, revealing remarkable resilience in tax revenue across 36 African countries despite unprecedented global shocks in 2022, writes Winston Mwale.
The report, ATAF's flagship publication since 2016, emphasizes the critical role of data-driven decision-making in maintaining this resilience.
It also features a comprehensive analysis of the tobacco tax landscape, underscoring its importance in broadening the tax base and fostering sustainable domestic revenue mobilization.
Key findings from the report include:
- Revenue collections rebounded significantly, growing 20.95% in 2022 from 16.34% in 2021, exceeding the long-term average by 7.96 percentage points.
- Average nominal GDP growth improved to 13.13% in 2022 from 11.15% in 2021, surpassing the long-term average by 2.34 percentage points.
- The average tax-to-GDP ratio increased to 15.43% in 2022 from 14.80% in 2021, with 69% of countries showing improvement.
- This ratio surpassed the pre-COVID average by 0.56 percentage points.
Regional analysis shows the Southern African Development Community (SADC) leading with a 17.49% tax-to-GDP ratio, followed by the East African Community (EAC) at 14.20%.
The Economic Community of West African States (ECOWAS) recorded 13.83%, while the Economic Community of Central African States (ECCAS) had the lowest at 12.18%.
ATAF Executive Secretary Logan Wort emphasized the evolving tax landscape, noting the lingering effects of the COVID-19 pandemic and the impact of the Russia-Ukraine war.
"The war has required governments to relook their supply chains and sources of agricultural products such as wheat grain due to blockages caused by the conflict," Wort said.
The report also highlights the significant profits gained by oil companies due to increased oil prices and stresses the importance of digital transformation in tax administration.
"Digital transformation is no longer an option but key to the strategic planning of both tax administration and policy," Wort stated.
The 2023 ATO edition provides evidence-based recommendations for reforms in tax administration and policy.
It highlights areas to broaden the tax base, narrow tax gaps, simplify and improve fairness in tax systems, and enhance overall voluntary compliance.
Wort encouraged tax administrators to leverage the insights and good practices shared in the report.
"I urge you to sample these and choose a country's good practices which apply to your needs, to contact that country, or make use of the various ATAF ATO platforms to facilitate the engagement," he said.
The ATAF invites tax administrators, policymakers, and other stakeholders to explore the publication for informed decision-making and improved revenue collection.
Download the report below:
