Africa can raise $469bn without tax hikes – AfDB

The African Development Bank (AfDB) says African countries can generate more than $469 billion in additional annual revenue without increasing statutory tax rates.

 

AfDB Chief Economist and Vice President for Economic Governance and Knowledge Management, Prof. Kevin Urama, disclosed this in an interview with the News Agency of Nigeria (NAN) in Abuja.

 

Urama said stronger domestic resource mobilisation remains the most sustainable source of development financing for the continent, noting that significant revenue can be unlocked through improved tax administration and compliance.

 

According to him, adopting best practices such as digitalising tax systems, strengthening public institutions, and enhancing service delivery would boost tax collection without imposing additional tax burdens on citizens.

 

“By improving tax administration through digitisation and other reforms, and simply adopting best practices, the continent can mobilise more than $469 billion extra without increasing tax rates. It is about improving efficiency and strengthening compliance,” he said.

 

 

 

The economist noted that many citizens are reluctant to pay taxes because they often provide essential services such as electricity, water, and road infrastructure for themselves.

 

He said governments can improve voluntary tax compliance by delivering quality public services, promoting transparency, and ensuring prudent management of public resources.

 

Urama added that the AfDB is supporting African countries, including Nigeria, to strengthen domestic revenue mobilisation through capacity-building programmes for national revenue authorities.

 

He also disclosed that the bank has developed a Public Service Delivery Index aimed at encouraging governments to improve service delivery and strengthen the social contract between citizens and the state.