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Image of multiple banknotes for international taxation

Sub-Saharan Africa and International Taxation: Time for Unilateral Action?

While sub-Saharan African (SSA) countries have made some progress in collecting more taxes domestically in the last 20 years, international tax issues remain a significant concern for these and other developing countries, reflecting aggressive tax planning by multinational enterprises (MNEs) and the international initiatives designed by G20-OCED countries in response. Drawing on a new CGD paper on international taxation and developing countries, we argue here that the time has come for SSA countries, and developing countries in general, to take unilateral action.

A table showing tax revenue as a share of GDP in sub-Saharan Africa

Enhancing Domestic Resource Mobilization: What are the Real Obstacles?

At the Center for Global Development, we recently initiated a project to develop more effective and equitable strategies for domestic resource mobilization in low-income countries in sub-Saharan Africa (SSA). The impetus for the project is the Addis Ababa Action Agenda for financing development, which calls on developing countries to step up their efforts to collect more taxes domestically to achieve the Sustainable Development Goals (SDGs). 

Figure 1: Tax Expenditure as a % of GDP

Time to Pay More Attention to Tax Expenditures?

It is time that donors and technical assistance providers turn their attention to tax concessions provided by developing countries struggling to raise more taxes from domestic sources. The granting of tax concessions is not only mostly opaque and prone to corruption, but these concessions are further constricting the already narrow tax base of countries, thereby undermining the Addis Ababa Action Agenda to promote domestic resource mobilization. There is a risk that additional revenues collected through tax reforms may be lost through tax concessions.