CMI/ICTD Working Paper WP 2014: 2

This paper reviews the state of knowledge on local government revenue systems in Africa, with a particular emphasis on commonalties and differences between Francophone and Anglophone countries in Sub-Saharan Africa. The analysis focuses on the composition of local government ‘own’ revenues, administrative practices, and how the current system affects economic efficiency and accountability. It is not meant as an exhaustive review of these topics. It aims to highlight some key issues that require greater attention and, in some cases, more substantial research.

The local government tax systems currently in place in Sub-Saharan Africa are largely adopted from the former colonial powers. In contrast to central government tax systems, local government tax systems in many African countries have remained largely unchanged since independence. Exceptions are reforms in East-Africa, which have led to the abolishment of some of the most unpopular taxes, including poll (head) taxes in Tanzania and Uganda, and simplification of the local government tax legislation and administrative practices. Generally, however, fiscal decentralisation reforms in SubSaharan Africa are limited to addressing the inter-governmental fiscal transfer system. The central government’s control of the local revenue system remains strong, and more so in the Francophone countries in West Africa than in Anglophone East Africa. Due to the overall fiscal constraints, the reform of the local tax system has been considered less important than mobilisation of central government revenues. Local tax systems are often distortive, costly to administer, and exacerbate inequity. Moreover, in most African countries there is little or no co-ordination between various levels of government with respect to taxation. This has partly to do with lack of capacity at all levels. At the local level the serious shortage of qualified staff at the treasury and planning departments is particularly critical.



Odd-Helge Fjeldstad

Odd-Helge Fjeldstad is a Research Professor at the Chr. Michelsen Institute, an Extraordinary Professor at the African Tax Institute, and a Senior Fellow of the International Centre for Tax and Development.

Gérard Chambas

Jean-François Brun