- Vito Tanzi, M. Yücelik, Peter Griffith, and Carlos Aguirre
- Published Date:
- October 1981
In concluding this statistical description of the tax systems of sub-Saharan Africa, it may be useful to highlight some of the major findings and present the basic questions raised by these findings—questions that can be answered only by a major research effort.
1. The spread in the ratio of tax revenue to GDP is considerable, raising the question of how some countries managed to meet their needs for revenue with tax ratios below 10 per cent while others had ratios of as much as 25 per cent. Interesting questions are: What kind of services are being provided by the countries with high tax ratios that are not being provided by the countries with low tax ratios? Can differences be found in public sector outputs (as measured by indices such as life expectancy, literacy, and rates of growth) between these groups?
2. Five countries (Togo, Somalia, Zambia, Benin, and Seychelles) had the highest ranking in the index of international tax comparison; Uganda, Ghana, Chad, Malawi, and Sierra Leone had the lowest ranking. It would be interesting to compare in detail (1) the tax structure of these two groups, (2) the public expenditure of the two groups, and (3) their fiscal situation.
3. In many sub-Saharan African countries, taxes have been offsetting a progressively smaller share of public expenditure in spite of the fact that, for the majority of these countries, the buoyancy of the tax systems has been well over 1. Therefore, fiscal crisis has been caused more by the expenditure side of the budget than by the revenue side. The question to be asked is: Why was the buoyancy of public expenditure so much higher than that of taxation?
4. Import duties account for the largest share of revenue in these countries. Is this inevitable? And what are the implications of this result for resource allocation, growth, income distribution, international competitiveness?
5. Export duties have also been significant sources of revenue. To the extent that these duties were not temporary but permanent, what was their effect on exports and production of the products subject to these taxes?
6. Income taxes are still relatively unimportant. What is the scope for these taxes in the future?