IMF: Tax reform could boost SSA's revenue by five percent of GDP

Key changes include stronger VAT systems and expanded coverage of income tax.

The International Monetary Fund (IMF) has said that Sub-Saharan African (SSA) countries could increase tax revenue by five percent of gross domestic product (GDP), on average, if they reform their tax policies.

In its recently released regional economic outlook, the IMF said that crucial steps would need to include strengthening value-added tax systems, streamlining exemptions and expanding coverage of income taxes, as well as developing new revenue sources (for example, property levies) and better using technology to ensure access to reliable information.

According to the IMF, SSA is the region with the world’s lowest ratio of revenue to GDP, despite substantial progress in revenue mobilisation over the past two decades. Moreover, the average tax frontier of the region is around 7.5 percentage points of GDP lower than the average for the rest of the world.

Pictured: IMF CEO Christine Lagarde