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Most African countries are in dire need of more tax revenue. In 28 out of 45 countries with a value-added tax (VAT), total tax revenue as a percentage of GDP is around 15% or less, falling short of what is necessary to finance basic human and economic development. Far from being revenue-raising instruments, current African VATs are riddled with exemptions, exclusions, and zero rates on domestic goods and services that depress revenue, are highly distortionary, and greatly complicate the administration of VAT.Modernizing VATs in Africa enables policymakers, professionals, and students to analyse African tax systems to ascertain how they can be modernized. It explains the case for VAT base-broadening over rate-increasing, arguing that exemptions and zero rates mainly accrue benefits for higher-income groups. Even more persuasively, it demonstrates that the net result of fiscal systems can be equalizing if the revenue of broad-based VATs is used to finance in-kind transfers, such as healthcare and education. VAT modernization should be used to enable governments to finance development; Modernizing VATs in Africa puts a compelling case forward for how and why this can be achieved.
This book investigates how African nations can reform their value-added tax (VAT) systems to increase revenue and support essential economic development. Sijbren Cnossen, an expert in tax policy, utilizes comparative fiscal data from across the continent to argue that current VAT structures are inefficient due to excessive exemptions and exclusions. He proposes a framework centered on base-broadening rather than rate-increasing, suggesting that a more robust VAT can fund critical public services like healthcare and education to achieve greater social equity.
What You Will Find
Experts recognize this work as a technical resource for policymakers and students of fiscal policy in developing economies. Readers frequently note the clarity of the author's arguments regarding the intersection of tax administration and social welfare.
Page Count:
368
Publication Date:
2019-09-16
Publisher:
Oxford University Press
ISBN-10:
0198844077
ISBN-13:
9780198844075
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