How can African governments raise tax revenue and still reduce poverty?
Dr Nic Cheeseman of Oxford University's African Studies Centre has partnered with the Department for International Development (DFID) and UN-Habitat as well as sub-national governments in Kenya, Nigeria and South Africa, to look at ways of raising taxes that do not push poor citizens into poverty.
In Africa, sub-national movements, such as the 36 states in Nigeria or the 47 counties in Kenya, are becoming increasingly important. For example, Lagos in Nigeria has a population in excess of 10 million and if recognised as a country rather than a state it would have the 5th largest GDP on the continent. Many think it impossible for these governments to raise tax revenues due to weak enforcement capacity and low legitimacy.
However, recent research conducted by Dr Nic Cheeseman, University Lecturer in African Politics, has shown that by providing high-quality, high-profile public services such as roads, health clinics, schools and police posts, sub-national governments can generate widespread popular support for tax payment.
Dr Cheeseman has partnered with the Department for International Development (DFID) and UN-Habitat as well as sub-national governments in Kenya, Nigeria and South Africa, to look at ways of raising taxes that do not push poor citizens into poverty. The governments can then use the revenue to provide public services and improve the conditions of the worst off.
To achieve this aim, the project is developing a handbook of policy, best practice and case studies for urban governments, as well as a specially designed piece of software called the Tax Revenue Impact Simulator (TRIS). TRIS will enable governments to bring key economic data together with levels of development and other demographic factors into a single model. Then, estimates of the amount of revenue that could be collected by the levying of different kinds of taxes can be calculated, and the impact these taxes would have on poverty levels can be generated.
In this way, Dr Cheeseman and his partners aim to help African sub-national governments manage revenue streams in order to raise revenue and reduce poverty, potentially improving the lives of millions of poor citizens.
This project was funded by Oxford's ESRC Impact Acceleration Account.