Africa can unlock more than $469 billion in additional annual revenue without raising statutory tax rates, according to the African Development Bank (AfDB).
Prof. Kevin Urama, Chief Economist and Vice President for Economic Governance and Knowledge Management at the African Development Bank (AfDB), said this in an interview with reporters on Wednesday in Abuja.
He said the additional revenue could be mobilized without increasing tax rates, stressing that stronger domestic resource mobilization remains the most sustainable source of development financing for the continent.
According to him, improving tax administration through digitization, strengthening public institutions, and enhancing service delivery would significantly increase tax compliance.
“We see that by improving tax administration through digitization and other reforms, and simply adopting best practices, the continent can mobilize more than $469 billion in additional revenue without increasing tax rates.
“It is simply about improving efficiency and strengthening compliance,” he said.
Urama said many citizens were reluctant to pay taxes because they often had to provide essential services such as electricity, water, and road infrastructure for themselves.
He noted that governments could improve voluntary tax compliance by delivering quality public services, strengthening transparency, and ensuring prudent management of public resources.
The economist said the AfDB was supporting African countries, including Nigeria, in strengthening domestic revenue mobilization through capacity-building programmes for national revenue authorities.
He added that the bank had also developed a Public Service Delivery Index to encourage governments to improve service delivery and strengthen the social contract between citizens and the state.
Urama said stronger domestic resource mobilization would reduce excessive dependence on external financing and provide countries with greater fiscal space to pursue development priorities.
