On 19 November 2019 the OECD published Revenue Statistics in Africa 2019 which is a joint initiative between the OECD, the African Tax Administration Forum (ATAF) and the African Union Commission (AUC), with the help of technical and financial support from other international organisations.

The 26 countries surveyed in Revenue Statistics in Africa 2019 account for almost three-quarters of Africa’s GDP. The tax-to-GDP ratios varied widely across these countries in 2017, ranging from 5.7% in Nigeria to 31.5% in the Seychelles. However the report indicates that the average tax-to-GDP ratio for the participating countries was 17.2% in 2017, unchanged from the two preceding years. This was a cause for concern because the non-tax government revenue showed a decline compared to the previous period.

At 17.2% the tax to GDP ratio in the African countries covered by the report was lower than the average ratios for Latin America and Caribbean (LAC) countries at 22.8% and lower than the average ratio for the OECD at 34.2%.

Non-tax government revenues in the surveyed countries continued to decline and were lower than tax revenues in 23 of the 26 countries. These non-tax revenues consist mainly of rents and royalties from natural resources and grants.

Taxation of goods and services is the most important source of tax revenue in the African countries surveyed. This type of tax represented an average of 53.7% of total tax revenue, of which value-added taxes (VAT) accounted for 29.4% of total tax revenues. An average of 18.6% of total tax revenue came from corporate income taxes (CIT) which was a higher proportion than in LAC and in the OECD and amounted to 2.8% of GDP in 2017.

The VAT and personal income tax (PIT) have grown in importance for the African countries during the last ten years although the revenue from PIT (15.4% of total tax revenues) and from social security contributions (8.1% of total tax revenues) is still low compared to other regions of the world.

The tax revenue in African countries could therefore potentially be increased by reforms to broaden the tax base for the PIT. Other useful measures would be to remove harmful and regressive subsidies and to broaden the coverage of social insurance.

By increasing the efficiency of VAT systems the countries could obtain higher and more sustainable revenues. Environmental taxes currently represent a small proportion of tax revenue collected but they are growing more important as they could both raise revenue and encourage the transition to a low-carbon economy. Property taxes can also make a contribution to revenue although they are much lower in Africa than in LAC and in the OECD. Improvements in governance and government spending could also lead to higher revenues by improving tax morale.