Categorie
Africa

Covid is a major setback for taxation in poor African countries (Odd-Helge Fjeldstad, Anna Gopsill, Ingrid Hoem Sjursen, Ole Therkildsen, DIIS)

In this brief, the authors discuss the long-term implications and effects of the pandemic on Domestic Resource Mobilisation (DRM) (taxation) in sub-Saharan African (SSA). The authors do not address the immediate short-term consequences of the pandemic on DRM as there is much attention on this issue already.

The pandemic’s largest impact on economic growth so far has been in tourism-dependent economies. In Tanzania, for example, the GDP growth rate fell from 5.8% in 2019 to 2.0% in 2020 and per capita growth turned negative for the first time in 25 years because of the pandemic.

For poor countries, which already faced significant underfunding of their Sustainable Development Goals (SDGs), the pandemic has both increased the need for more revenue and made its domestic resource mobilisation more difficult.

Covid is a major setback for taxation in poor African countries | DIIS