Tax Expenditures in Sub-Saharan Africa

Departmental Papers, October 7, 2025

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Tax Expenditures in Sub-Saharan Africa

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Bibliographic details

• Authors: Todd Schneider, Sandhya Rajyam Garimella, Li Liu, Simon Naitram, Can Sever, Felix F. Simione, Irena Jankulov Suljagic, Qianqian Zhang
• Published: October 7, 2025
• Series: Departmental Papers
• DOI: https://doi.org/10.5089/9798229023887.087

Overview

• Tax expenditures in sub-Saharan Africa (SSA) are less well understood than in other regions and in some cases represent a significant element of fiscal policy.
• Tax expenditures are provisions within tax systems that reduce tax liability relative to a benchmark and can include tax exemptions, deductions, credits, or preferential rates.
• These provisions can impact revenue collection, equity, and governance.
• The paper seeks to:
  • shed light on tax expenditures in SSA;
  • draw attention to significant data gaps, transparency, and governance issues in the region;
  • build on studies by other institutions and agencies;
  • review how the IMF has engaged on this issue in recent years;
  • highlight the importance of tax expenditures to macro-fiscal stability in the current liquidity-constrained environment;
  • offer practical recommendations to policymakers and external stakeholders for advancing work in this area.

Key findings and analysis

• Presence and nature of tax expenditures:
  • Tax expenditures in SSA include exemptions, deductions, credits, and preferential rates.
  • In some cases, tax expenditures constitute a significant element of fiscal policy.
• Data, transparency, and governance issues:
  • The region exhibits significant data gaps on tax expenditures.
  • Transparency and governance challenges limit understanding and oversight of tax expenditure programs.
• Fiscal and macro implications:
  • Tax expenditures affect revenue collection, equity, and governance.
  • The paper emphasizes the importance of tax expenditures to macro-fiscal stability, especially in a liquidity-constrained environment.
• IMF engagement:
  • The paper reviews recent IMF engagement on tax expenditures in SSA and situates the discussion within broader IMF work on revenue mobilization and public financial management.

Practical recommendations (as presented)

• The paper offers practical recommendations to policymakers and external stakeholders for advancing work on tax expenditures in SSA.
• Recommendations aim to address:
  • data gaps;
  • transparency;
  • governance;
  • the integration of tax expenditure analysis into macro-fiscal and PFM frameworks.

Key statistics

• Pages: 49
• Publication date: October 7, 2025
• Series: Departmental Paper No 2025/006
• Issue: 006
• Volume: 2025
• ISBN: 9798229023887
• ISSN: 2616-5333
• DOI: https://doi.org/10.5089/9798229023887.087
• Authors: Todd Schneider, Sandhya Rajyam Garimella, Li Liu, Simon Naitram, Can Sever, Felix F. Simione, Irena Jankulov Suljagic, Qianqian Zhang

Source: "Tax Expenditures in Sub-Saharan Africa", Departmental Papers (IMF), October 7, 2025.

Content in this bundle

• Tax Expenditures in Sub-Saharan Africa; Departmental Paper No. 2025/006; October 2025
  • Tax Expenditures in Sub-Saharan Africa; Departmental Paper No. 2025/006; October 2025 (Markdown version)
  • Tax Expenditures in Sub-Saharan Africa; Departmental Paper No. 2025/006; October 2025 (PDF)