ABUJA, Nigeria (VOICE OF NAIJA)-The African Development Bank has said African countries can generate more than $469bn in additional annual revenue without increasing statutory tax rates.
The bank’s Chief Economist and Vice President for Economic Governance and Knowledge Management, Prof Kevin Urama, disclosed this in an interview with the News Agency of Nigeria on Wednesday in Abuja.
Urama said the revenue could be mobilised through stronger domestic resource mobilisation, which he described as the most sustainable source of development financing for the continent, rather than through tax hikes.
He explained that improving tax administration through digitalisation, strengthening public institutions and enhancing service delivery would significantly boost tax compliance across Africa.
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“We see that by improving tax administration through digitisation and other reforms, just adopting best practices, the continent can mobilise more than $469bn extra without increasing tax rates.
It is simply about improving efficiency and strengthening compliance,” he said.
According to him, many citizens are often unwilling to pay taxes because they are forced to provide basic services such as electricity, water and road infrastructure on their own.
He noted that governments could encourage voluntary tax compliance by improving public service delivery, promoting transparency and ensuring effective management of public resources.
Urama added that the AfDB was working with African countries, including Nigeria, to strengthen domestic revenue mobilisation through capacity-building programmes for national revenue authorities.
He further stated that the bank had introduced a Public Service Delivery Index aimed at encouraging governments to improve service delivery and reinforce the social contract between citizens and the state.