Unfair taxation in Sub-Saharan Africa

The lack of effective taxation systems in Sub-Saharan Africa is responsible for the high levels of poverty suffered by so many on the continent.

Not only does tax play a key role in redistributing wealth but is also crucial for mobilizing revenue to fund services, infrastructure and other development needs for building the accountability of states to their citizens.

A continuous tax policy changes the incentives for extreme income and wealth, setting society on a new path for wealth creation and distribution in the future. The Christian Aid and Tax Justice Network-Africa (TJN-A) believe that a fair tax system means that, those who have more should pay more, while those who have less should pay less. If African societies are to become more equal, Progressive taxation is necessary.

A variety of measures funded through taxation can be used to the implementation of an appropriate minimum wage, as well as other policies to increase wages, land reform to reducing the inequality of land ownership and progressive expenditure which should seek to increase the income, assets and access of poorer members of society. All these are extremely important elements of an equitable national development strategy, redistributive taxation is the fundamental point of any strategy to reduce income inequality.

To reduce inequalities in sub-Saharan Africa, there is a need to increase both spending on social service provision and the sectors on which the poor depend on heavily, like agriculture as well as ensuring that spending is directed in such a way that imbalance between groups is limited. Progressive expenditure of this kind would reduce poverty by increasing access to basic services and ensuring the poor are able to generate an income for themselves, as well as by reducing inequalities in access and outcomes. A lot of people from Africa depend on agriculture for a living, In the Maputo declaration in 2003, African leaders made a commitment to allocate 10% of national budgets to agriculture under the Comprehensive African Agriculture Development Programme but years later the sector still suffers from severe neglect and under-investment, only few countries have reached this target.

The sub-Saharan Africa spends the lowest of all the world’s regions on social service provision, with the annual average of 8.7% of GDP. The state is nearly absent in rural areas and the urban slums where large numbers of residents live in awful conditions. Basic provision of water, sanitation, health, education and security services is very poor.

The poorer regions within countries mostly in rural areas, often receive less spending and support than better off areas. For instance the analysis of the health sector in Kenya, shows that the health services in the rural areas which are commonly used by the poor are highly neglected .Same case applies to education, Kenya spends less per pupil in its most disadvantaged regions than in its most prosperous areas.

Strong leadership in addition to progressive spending is critical to reducing poverty and inequality in sub-Saharan Africa. Taxpayers should ensure their government is responsive to their needs and to perceive results to their future tax contributions