Exploring the Dynamic of the Tax Gap in Africa
Les options politiques de lutte contre la pauvreté et les inégalités en Afrique
- Foly Ananou
- Georges Vivien Houngbonon
In this paper, we set up a new methodology to identify whether the tax gap within African countries has been narrowing, widening or has remained flat over the last decade. Our estimation shows that the tax gap has remained flat in Africa over the last decade. More specifically, no African economy has closed its tax gap with respect to its comparable peer. There is some evidence that countries with initially larger indirect tax gap are catching up with their peers. However, the rate of convergence is so low that the dynamic of the tax gap is not statistically significant. Therefore, there is some scope for public policies to close the tax gap in Africa.