Energy-related Tax Expenditures in Africa

Project Researchers: Dr. Neil McCulloch & Dr. Roel Dom
Past Project

This project will explore the scope and size of energy-related tax expenditures in Africa. Tax expenditures (including rate reductions, exemptions and other forms of foregone revenue) can significantly reduce the overall revenue received by African governments. The literature on energy subsidies suggests that energy-related tax expenditures are often among the largest forms of revenue loss. This project will review the literature on tax expenditure and energy subsidies, and combine data from the IMF on the size and types of energy subsidies with information in the Government Revenue Dataset on the size of tax revenue to get a sense of the relative importance of energy related tax expenditures in different African countries. To the extent possible, it will estimate the potential revenue that might be captured by reform to energy subsidies and put forward a set of recommendations, both for policy and further research.