Revenue Reform and Statebuilding in Anglophone Africa

Abstract

Within the development field, tax administration reform is an area of relative success. Over the past two decades, the national revenue systems of most countries in anglophone Africa have undergone major reforms. These comprise, in particular, the introduction of Value Added Tax (VAT), the adoption of 'advanced' tax administration practices, and the creation of semiautonomous revenue authorities. What do these reforms imply for emerging patterns of politics and governance in anglophone Africa? The first conclusion is conceptual and theoretical. The impact of these reforms has been shaped by the broad context within which they were being implemented, especially the increasingly transnational character of many important policymaking relationships (Orenstein and Schmitz 2006; Stone 2008; Weiss 2005). Senior African revenue staff feature increasingly in transnational expert networks, and face a wider range of employment opportunities, public and private, both at home and abroad. The second conclusion is that these revenue reforms have contributed only modestly to statebuilding. While the new revenue agencies are in many respects impressive organisations, actual revenue collection has not increased much; improvements in organisational capacity have been concentrated at national and capital city level; potentially synergistic improvements in the capacity to formulate tax policy have not occurred; and some anticipated spillover benefits from improving the revenue collection apparatus have not been realised. The third conclusion is that, while these reforms have made it possible for governments to raise revenue from the organised private sector in a more 'Weberian' (institutionalised, rule-bound) and a more consensual manner, they have also increased the possibility that the taxation system will be shaped by private sector interests, making it difficult for governments to raise the revenue that they claim they need.

Aid and domestic resource mobilization with a focus on Sub-Saharan Africa

“…The trend in bureaucratic costs is likely to favour taxes over aid, given emphasis on improving public finance management (PFM) and encouraging anti-corruption measures. Even if PFM and tax administration reforms are difficult to implement effectively to achieve sustained improvements (Andrews, 2013) there have been significant achievements in tax administration and fiscal reforms (Moore, 2014) that reduce the bureaucratic costs of taxation. Ahlerup et al (2015) provide evidence that semiautonomous revenue authorities in SSA have been associated with increased tax collection for given tax rates, at least in the short term (the effect tends to plateau after about five years).…”

“…It can be inferred from the literature that the fundamental determinant of whether aid and donors can promote DRM is the willingness of the recipient to implement tax reforms. The evidence on tax reform is promising: significant reforms to tax structure have been implemented in many countries, increasing efficiency (of the tax system and collection) and reducing distortions (Keen and Mansour, 2010), in addition to improvements in tax administration (Moore, 2014). The policy implications discussed in the final section are the types of interventions that can help to improve tax performance and promote DRM.…”

Does expanding fiscal space lead to improved funding of the health sector in developing countries?: lessons from Kenya, Lagos State (Nigeria) and South Africa

“…This is a striking gap, given that most African countries fall far below the 15% target set by the Abuja Declaration of 2001 [23], and that considerable attention is being paid to improving the tax collection capacity of low- and middle-income countries [13–15]. This begs the questions: which sectors are benefiting from improved fiscal space, what explains the public health sector’s position in this competition for more resources, and how can Ministries of Health influence resource allocation decision-making in their favour?…”

Political competition and tax revenues in developing countries

“…2 This choice is justified by the fact that these different categories of taxes constitute a stable base of revenue mobilization in most developing countries. In fact, they are non-resource taxes and their collection constitutes a huge challenge for developing countries in this current era of liberalization (Di John, 2006;Ebeke & Ölçer, 2013;Moore, 2014). Pol it is a measure of political competition that captures the probability that two deputies picked at random will be of different political parties.…”