DIIS-Covid-19大流行对贫穷非洲国家创收的影响（英文）-2020.12-64页_928kb

Summary of the Implications of the COVID-19 Pandemic for Revenue Generation in Poor African Countries

Core Content

The document analyzes the impact of the COVID-19 pandemic on domestic revenue mobilisation (DRM) in poor African countries, particularly Denmark's partner countries in Sub-Saharan Africa (SSA). It outlines the main messages, background, economic effects, tax system characteristics, and strategic recommendations for donor support, especially from Denmark, in the context of the pandemic.

Main Messages from the Study

• Tax collection in SSA has performed relatively well compared to Latin America and much worse than South Asia, despite structural challenges.
• The pandemic will have significant and negative impacts on revenues in many African countries, especially those reliant on international trade, petroleum exports, tourism, and hospitality.
• Donor support to DRM can yield substantial returns, but must be context-specific, demand-driven, and strategically aligned with local political and economic realities.
• Tax-to-GDP ratios in poor countries have grown slowly, and the IMF's goal of a 5% increase by 2030 is unrealistic, especially post-pandemic.
• Revenue increases should come from gradual improvements across multiple tax bases, not just a few, and reducing tax exemptions and subsidies.
• Major redistribution through taxation is not feasible in most poor African countries due to low revenue-to-GDP ratios, lack of political support, and limited institutional capacity.
• Focusing solely on revenue increases is inadequate; funds must be invested in productive public expenditure and institutional strengthening to improve development outcomes.
• Democracy and tax collection are closely linked, and the pandemic threatens this relationship by undermining accountability and public participation.

Key Economic Impacts of the Pandemic

2.1 Economic Slow-Down and Lower Revenues

• The pandemic has caused a significant economic contraction in SSA, with the World Bank and IMF projecting a 3% decline in GDP for 2020.
• This marks the first recession in SSA in 25 years, and real per capita GDP is expected to drop by 6%.
• Government revenues are projected to fall by 2.3 percentage points of GDP in 2020.
• Revenues from international trade, tourism, and extractive industries are especially vulnerable.
• Capital expenditure will be more affected than recurrent expenditure.

2.2 Rising Poverty and Inequality

• The pandemic is expected to increase poverty and inequality in poor countries.
• Global estimates suggest 80–395 million people could fall into extreme poverty, with 33–37 million in SSA.
• Inequality trends have worsened after major epidemics such as SARS, H1N1, MERS, Ebola, and Zika.
• The Gini coefficient has increased in most of Denmark's partner countries, with Ethiopia showing a modest rise.
• Redistribution through taxation is not feasible in most poor African countries due to low tax capacity and limited political will.

2.3 Policy Responses Vary

• Policy responses to the pandemic differ significantly among Denmark's partner countries.
• Ethiopia, Kenya, and Uganda implemented strict lockdowns, while Niger and Tanzania were less stringent.
• Tax relief measures have been introduced in several countries, particularly for small and medium enterprises (SMEs) and tourism sectors.
• Informal economies, which account for 75–85% of employment in East and West Africa, have been largely ignored in most policy responses, despite their vulnerability.

2.4 Threats to Democracy

• The pandemic has weakened democratic institutions, enabling governments to delay elections, suppress dissent, and undermine accountability.
• Democracy and tax collection are positively correlated, and the weakening of democracy may reduce tax collection capacity.
• Tanzania and Ethiopia have seen restrictions on freedom of the press and suppression of opposition activities in the context of the pandemic.

Tax System Characteristics in Denmark's Partner Countries

3.1 Modest and Slowly Growing Tax-to-GDP Ratio

• The average tax-to-GDP ratio in Denmark's partner countries has increased slowly over the past three decades.
• Stable countries (Ethiopia, Kenya, Tanzania, Uganda) saw an increase of ~4 percentage points, while fragile states (Burkina Faso, Mali, Niger) saw ~6 percentage points.
• The IMF's target of a 5% increase by 2030 is unrealistic and even more so post-pandemic.

3.2 Relatively Progressive Tax Systems

• Large taxpayers (MNCs, big local firms) are major contributors to government revenues.
• These large entities often receive tax benefits, but collectively they contribute significantly to public revenues.
• Sub-national tax systems are less progressive and sometimes regressive.
• VAT may be progressive in poor countries due to the large informal sector and exemptions for poor households.

3.3 Indirect Taxes are More Important

• Indirect taxes (e.g., VAT, excise duties) are more significant revenue sources than direct taxes (e.g., corporate and personal income tax) in SSA.
• Direct taxes have grown more rapidly than indirect taxes from 2000 to 2017, but this trend may not continue.
• Indirect taxes are more vulnerable to economic shocks and informal activity, but they also offer potential for revenue growth.

Strategic Recommendations for Danish Support

6.1 Support to DRM is Central for SDG Financing

• DRM is crucial for achieving the Sustainable Development Goals (SDGs).
• It should be strategically prioritized in Danish development assistance.

6.2 Major Redistribution Not Realistic

• Redistribution through taxation is not feasible in most poor African countries due to low tax-to-GDP ratios and lack of political support.
• Tax systems are relatively progressive, but public expenditure patterns must also be considered to assess overall impact on inequality.

6.3 Support Must Be Context-Specific and Coordinated

• Donor support should be demand-driven, context-specific, coherent, and long-term.
• It should be tailored to fragile and stable countries with different economic and political contexts.

6.4 Support to International and Regional Tax Networks

• Strengthening international and regional tax cooperation (e.g., through the African Tax Administration Forum (ATAF)) is important for improving DRM.
• Tax transparency, anti-corruption, and tax compliance can be enhanced through multilateral collaboration.

6.5 Support to Civil Society

• Civil society plays a key role in tax governance and policy advocacy.
• Donor support should engage civil society to improve tax compliance, accountability, and public participation in DRM.

Conclusion

The pandemic has significantly impacted revenue generation in poor African countries, especially those reliant on international trade, tourism, and natural resources. While tax collection has been relatively efficient, revenue growth has been slow, and the IMF's target of a 5% increase by 2030 is unrealistic. Donor support, particularly from Denmark, should be strategically targeted, demand-driven, and context-aware to improve tax systems, public expenditure, and state capacity. The focus should be on gradual reforms, coordinated efforts, and engagement with local stakeholders to ensure sustainable and equitable development.