Most Africans say their willingness to pay taxes is undermined by corruption among revenue authorities in their country, while an opaque tax system actually encourages tax dodging, a new survey shows.
More than one-third of people surveyed in 29 African countries between 2011 and 2013 said that “most” or “all” tax officials are corrupt, and another 39 percent think that at least some of them are, according to the report by Afrobarometer.
“Distrust in the conduct of tax officials increases tolerance for tax avoidance in principle, and reported non-compliance with tax obligations in practice,” said the report, Africa’s Willing Taxpayers Thwarted by Opaque Tax System, Corruption.
Although the majority of Africans said they think that paying taxes is important for development , most people find it difficult to know how much tax they pay and how the governments uses it.
According to the report, 62 percent say it is difficult to find out what taxes they owe, while 76 percent say it is difficult to find out how the government uses tax revenue.
People in West Africa expressed the highest support for taxation but the lowest levels of confidence that everyone complies with their tax obligations. East Africans face the greatest information barriers, whereas Southern Africans have better access to information and perceive less corruption, it said.
Taxes collected in most African countries fall far below their actual public-sector spending needs, thus most African countries have been forced to rely on foreign aid to fill the gap.
“As governments face demand for better services and improved living conditions from growing populations, reform of tax and public finance systems to improve domestic revenue collection are likely to remain top development priorities,” the study says.
The findings suggest that African governments need to improve the transparency and accountability of revenue authorities if they want to strengthen the foundations of a sound revenue system.