There’s something compelling about the promise of digitalisation. Dashboards, portals, and apps suggest efficiency, transparency, and modernity. For many African tax administrations seeking to boost revenue, digital tools appear transformative.
Indeed, mobile tax apps, e-filing portals, and Electronic Fiscal Devices (EFDs) have been adopted across the continent to improve efficiency and compliance. In Kenya and Tanzania, EFDs have increased data visibility and reduced VAT underreporting. However, it hasn’t been all smooth sailing which has raised a critical question: can technology alone substitute for robust systems and effective management?
Integrated Digital Public Infrastructure (DPI) can support tax administration but outcomes depend on implementation and adoption
1- Ghana and Uganda: digital IDs
Both countries have used digital ID systems to broaden the tax register, particularly bringing in women and young people. Yet, registration does not automatically translate into revenue. Many taxpayers remain inactive, and without real-time synchronisation and continued engagement, integration alone does not guarantee usable data or improved administration.
2- Burkina Faso, Ghana, Rwanda, Tanzania and Uganda: digital merchant payments
These countries have expanded the use of digital merchant payments, which make transactions faster and easier to trace. The data also holds promises for improving credit access and Know Your Customer (KYC) processes. Adoption, however, remains uneven. Transaction fees, limited infrastructure, and knowledge gaps, particularly among women and small traders, limit uptake. More importantly, even where payments are widely adopted, they only translate into higher revenue if tax authorities actively embed the data into compliance processes.
The missing link: compliance risk management
Taken together, these experiences highlight a central lesson: digitalisation by itself cannot secure compliance. A key component is how administrations use the data.
If there’s one missed opportunity in this digital wave, it’s compliance risk management (CRM). CRM isn’t just a box to tick, it is the engine that turns digital data into meaningful action. Rwanda illustrates this well. By drawing on the Tax Administration Diagnostic Assessment Tool (TADAT), the Rwanda Revenue Authority built a centralised risk register, trained analysts, and embedded CRM into decision-making. The result was more targeted audits and better taxpayer services.
Put simply, collecting data without CRM is like installing a surveillance system but leaving the screens unattended.
Digital tax reforms alone can’t fix structural gaps
TADAT assessments reveal persistent gaps in tax administration that technology alone cannot overcome. They include:
- Incomplete taxpayer registers: Many registers contain duplicates, outdated contacts, or omit informal businesses.
- Siloed systems: Filing, payments, and registration often operate separately, slowing efficiencies. Administrative data often does not flow seamlessly across government institutions, limiting its potential for tax enforcement.
- Data without insight: Authorities collect more information than ever, but not all of it is analysed. Without risk models or targeted enforcement, the potential of this data remains underused.
These findings are not meant to discourage reform. They underscore that digital tools work best when built on strong institutional foundations. Platforms can amplify well-functioning systems, but they cannot replace efforts to ensure data accuracy, system integration, and proactive compliance management.
Turning potential into real results
Digital reforms only succeed when paired with the right foundations and strategies. Here are priority actions African tax administrations can take to ensure digitalisation translates into stronger compliance and better services:
- Fix the basics first. Clean up the taxpayer register, even if that means going door-to-door or verifying records with field data. At the same time, address gaps in national ID systems.
- Invest in people, not just platforms. Build a vibrant compliance risk unit and train officers to interpret trends while empowering them to act on data.
- Connect existing systems before layering new ones to avoid silos.
Beyond getting the basics right, here’s what African tax leaders can do to leverage technology for a smarter and stronger tax system:
- Budget for data quality work and in-house solutions, not just software licenses and off-the-shelf tools.
- Measure real performance, not just tech adoption and revenue statistics.
- Involve taxpayers in the journey. Better communication and support go a long way in encouraging the use of digital platforms.
Building smarter tax systems with Digital Public Infrastructure
The above steps reflect a broader conceptual shift in digitalisation and pave the way for the implementation of DPI, a set of horizontal and interoperable digital layers (digital IDs, digital payments, and data exchange), designed to serve societal purposes at scale, including tax administration.
Where basic data and technology systems are in place, DPI can deliver meaningful results. Tanzania illustrates this potential: biometric IDs have helped clean up taxpayer registers, while government payment platforms have improved transparency and boosted revenue collection.
With strong foundations and solid institutions, DPI can truly enhance efficiency and compliance, demonstrating the transformative potential of new technologies.
