Africa Rising? Inequalities and the essential role of fair taxation
New report by Tax Justice Network Africa and Christian Aid
After a decade of high growth, a new narrative of optimism has taken hold about Africa and its economic prospects. However, alongside some reductions in poverty, there is a broad consensus that progress in human development has been limited given the volume of wealth created. There is growing concern that the high levels of income inequality in sub-Saharan Africa are holding back progress.
This new report by Tax Justice Network Africa and Christian Aid investigates the trends in income inequality in eight sub-Saharan African countries and locates these in an analysis of tax systems, given the primary importance of national tax systems in redistributing wealth. The report looks at national taxation systems and international taxation issues – and, critically, the relationship between them. In this way it reveals how the enabling environment for tax dodging impacts on national tax systems in sub-Saharan Africa. It also dissects the trends in revenue generation, tax equity and tax reforms across the countries studied.
In a context of rising inequality, the role of taxation in redistributing income is particularly critical. However, the report shows the extent to which illicit financial flows and regressive tax systems undermine this potential. It makes recommendation to African governments and to the G20 and OECD countries, urging action at national and global levels.