Modernizing VATs in Africa

Sijbren Cnossen is Professor of Economics at the University of Pretoria and Academic Partner of CPB Netherlands Bureau for Economic Policy Analysis. He is Professor Emeritus of Economics of the University of Maastricht and Professor Emeritus of Tax Law of Erasmus University Rotterdam. Prof Cnossen previously occupied the Henry Shattuck Chair at the Law School of Harvard University and the Global Law Chair at the University of New York. He has advised many countries on the design of their tax systems under the auspices of the IMF, the World Bank, USAID, OECD, EU Commission, HIID, and GTZ. He has published numerous books and articles on the effects of taxation and on tax policy, including issues pertaining to tax coordination, income and corporation taxes, value- added tax, and excise duties.

• 1: Why VAT? 2: What Is VAT? 3: Other Broad-Based Consumption Taxes 4: Overview of VATs in Africa 5: Countries without VAT 6: Revenue Performance 7: VAT Incidence and Rate Structure 8: Economic Integration and Tax Coordination in Regional Economic Communities 9: Exemptions and Exclusions: the Achilles Heel of VAT 10: Non-Standard Exemptions and Zero Rates 11: Governments and Activities in the Public Interest 12: Immovable Property 13: Financial Services 14: Insurance 15: Lotteries and Gambling 16: Small Businesses and Farmers 17: Basic Administrative Processes 18: Agenda for VAT Modernization Appendices A: Africa: VAT Treatment of Essential Goods and Services, 2018 B: Africa: VAT and Excise Tax Treatment of Selected Goods and Services, 2018 C: Africa: Sales Taxes and Excise Systems in Non-VAT Countries, 2018 D: Africa: Basic Economic and Institutional Indicators in VAT Countries, 2016

This is a rich and deep book on a messy topic: the state of real VATs in Africa, and what must be done to improve their design, operation, revenue yield and, ultimately, their political acceptance. My discussion of unaddressed question aims to broaden the narrative around VAT reform rather than criticize. Anyone interested in taxation and revenue mobilization in Africa and anywhere in the developing world should read the book. The same goes for anyone involved in attempts to launch a new VAT or improve any existing VAT.