Book Review: Taxing Africa: Coercion, Reform and Development
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Bibliographic details
- Authors: Axel Schimmelpfennig
- Published: March 1, 2019
Overview
- Reviewer: Axel Schimmelpfennig, division chief, IMF African Department.
- Publication: F&D Magazine, March 2019.
- Book: Taxing Africa: Coercion, Reform and Development, Zed Books, London, 2018, 288 pp., $24.95.
- Review summary: The book offers an illuminating history of taxation in Africa and describes the current state of play, drawing on the authors’ broad experience advising governments on tax policy and revenue administration. It is written in nontechnical language and is intended for readers interested in tax policy and revenue administration.
Historical context of African taxation (as presented)
- Colonial origins:
- Taxes were levied mainly on Africans and designed to force workers into the cash economy, working for European farms or mines.
- Some taxes remain associated with this colonial period and face strong opposition.
- Post-independence era:
- Governments taxed agriculture and mining exports to develop local industry and redistribute income.
- 1980s and 1990s:
- African countries moved to a more market-based approach and away from mainly taxing exports.
Current tax systems and major challenges
- Typical tax mix:
- Direct taxes on personal and corporate income.
- Indirect taxes on consumption, such as a value-added tax.
- Key challenges identified:
- Potential for local taxes is limited by the bribes citizens must pay to receive basic services.
- Difficulty in collecting taxes from rich and influential citizens.
- Multinational companies using sophisticated strategies to shift income to tax havens create challenges for tax collection.
- Powerful vested interests obstruct reforms in revenue administration.
Potential and reforms for revenue mobilization
- Recent progress:
- The median sub-Saharan African country improved revenue collection from about 14 percent of GDP in the mid-1990s to more than 18 percent of GDP in 2016.
- Revenue needs and development goals:
- The IMF estimates that many low-income countries must spend an additional 14 percent of GDP to achieve the United Nations’ Sustainable Development Goals by 2030.
- Sources of optimism:
- Increasingly sophisticated revenue administration authorities in Africa can help design and implement better tax systems (examples cited include Rwanda and Uganda).
- A political counterweight is emerging as civil society starts to support revenue mobilization, seeking to improve fairness, equity, reciprocity, and accountability.
- Governments can more effectively explain the need for taxes by pointing to the spending these taxes pay for.
Assessment of the book’s contributions and limitations
- Strengths:
- Broad, experience-based perspective on taxation and revenue administration.
- Nontechnical language makes the book accessible and stimulating for a wide audience.
- Encouraging emphasis that African leaders are increasingly looking for African solutions.
- Limitations noted by the reviewer:
- The review suggests that policy-minded readers might appreciate a few more concrete ideas about what governments can do.
Key statistics and facts (preserved exactly)
- "about 14 percent of GDP in the mid-1990s"
- "more than 18 percent of GDP in 2016"
- "many low-income countries must spend an additional 14 percent of GDP to achieve the United Nations’ Sustainable Development Goals by 2030"
- Book details: "Zed Books, London, 2018, 288 pp., $24.95"
Source: Book Review: Taxing Africa: Coercion, Reform and Development – IMF Finance & Development Magazine | March 2019
Content in this bundle
- تحصيل الضرائب
- Book review — Taxing Africa
- Recaudación de impuestos ● Finanzas y Desarrollo ● Marzo de 2019
- Notes de lecture : La perception des impôts
- Книжное обозрение – Финансы и развитие – март 2019 года
- 征 税 - 书 评 - 金融与发展