ICTD Policy Brief 22
Tax administrations in Africa are paying increasing attention to taxing the wealthy or high net worth individuals (HNWIs). This reflects both the growing inequality of wealth and income within countries, and governments’ needs to mobilise more domestic revenue. In many countries, the main barrier is not a lack of taxes that apply to wealthy individuals. Personal income tax, rental income tax, capital gains tax, withholding taxes, property-related taxes, and taxes on investment income already exist, but are often weakly enforced. This policy brief draws on operational evidence from 14 African revenue administrations to examine why this gap persists, and what can be done about it. This was gathered through a structured workshop co-hosted by ICTD, the African Tax Administration Forum and the Uganda Revenue Authority in October 2025, an extended survey run with attendees in preparation for the workshop, and a smaller follow-up survey.
The findings point to a common set of constraints. Revenue authorities often struggle to define HNWIs in a way that matches local economic reality, to access and use third-party data, to link information across different types of taxes and different government agencies, and to protect enforcement teams from internal and external pressure. Dedicated HNWI units can improve compliance, but they are frequently understaffed and remain dependent on broader institutional support. African governments should prioritise strengthening the enforcement of existing taxes, improving data sharing and personal identification systems, and aligning the taxation of capital income more closely with income from labour. In Africa, as in most of the world, tax rates on income from capital are consistently lower than rates on employment income. Specific wealth taxes, levied on total assets, may have a role in some contexts, but they are likely to be feasible only after stronger administrative, legal, and political foundations have been established. Increasing the compliance of richer people with existing taxes is in most cases the best way of taxing wealth more effectively.
Key messages
- African countries can raise more revenue from HNWIs by enforcing existing taxes more effectively. Most tax systems already include taxes on personal income, rent, dividends, interest, capital gains, property, and other income streams that matter for wealthy individuals. The immediate challenge is often weak enforcement rather than the absence of relevant tax handles.
- Defining HNWIs requires country-specific criteria. Revenue authorities usually need to combine income, assets, occupation, ownership of companies, rental income, land and property transactions, customs data, and indicators of political or economic influence. The best definitions are those that can be operationalised with available data and refined over time.
- Constraints on the availability of data, and problems in linking data from different sources, are the main administrative barriers to more effective use of different tax handles. Tax returns often fail to capture the information needed to identify wealthy individuals and their income streams, while third-party data held by land agencies, company registers, central banks, city authorities, financial institutions, and financial intelligence units is often difficult to access, match, and use.
- Dedicated HNWI units can help, but they are not a panacea. They need sufficient staff, seniority, audit skills, data analytics capacity, legal support, and clear standing within the revenue authority. Without these, they risk becoming small under-resourced teams responsible for a politically sensitive and technically demanding taxpayer segment.
- Political backing is essential for effective enforcement. Wealthy individuals may be politically connected, and able to put pressure on tax officials, senior management, and other government actors. HNWI programmes therefore need explicit support from senior revenue authority leadership, and, in sensitive cases, from the ministries of finance and political principals.
- In most African contexts, explicit wealth taxes – i.e. annual levies on total individual or family assets – are not the best point from which to start taxing the wealthy more effectively. Most tax administrations need stronger data systems, valuation capacity, third-party reporting, taxpayer identification, and enforcement credibility before they can successfully levy wealth taxes. Ensuring that wealthy people are more compliant with existing taxes is the more immediate and reliable route to taxing wealth more effectively.
