The African Tax Administration Forum (ATAF) has released the 2023 edition of the African Tax Outlook (ATO). This flagship publication presents tax revenue and administration data from 36 participating African countries. This edition features a seminal comprehensive analysis of the tobacco tax landscape across the continent, emphasising the critical role of tobacco taxes in broadening the tax base and fostering sustainable domestic revenue mobilisation.
The publication highlights that while Africa has the lowest smoking prevalence compared to other World Health Organization regions, the number of tobacco smokers is projected to increase, rising from 52 million in 2000 to 84 million in 2025. The younger population significantly contributes to this increase, underscoring the need for effective tobacco taxation mechanisms.
Insights from the 2023 ATO indicate a notable recovery in GDP and tax revenue performance in 2022. Average nominal GDP growth improved to 13.13% in 2022 from 11.15% in 2021, surpassing the long-term average. Revenue collections saw a significant growth of 20.95% in 2022, up from 16.34% in 2021. The average tax-to-GDP ratio also increased to 15.43% in 2022, with 69% of countries recording an increase compared to 2021.
Regionally, the Southern African Development Community (SADC) had the highest average tax-to-GDP ratio at 17.49%, followed by the East African Community (EAC) at 14.20%. The Economic Community of West African States (ECOWAS) and the Economic Community of Central African States (ECCAS) recorded ratios of 13.83% and 12.18%, respectively.
The ATAF Executive Secretary, Logan Wort, urged decision-makers to leverage the insights from the ATO to implement reforms in tax administration and policy. “By doing so, we can broaden the tax base, narrow tax gaps, simplify and improve fairness in tax systems, and enhance overall voluntary compliance,” he stated.
The 2023 ATO edition is a comprehensive resource, providing evidence-based recommendations for tax administrations and policymakers. ATAF invites tax administrators, policy makers, including other relevant stakeholders to explore the publication and utilise its insights for informed decision-making and improved revenue collection.
