The contribution of tax revenue to the Gross Domestic Product (GDP) is lower in African countries and other developing countries by between (16-18%) than in developed countries (33%). Only the revenues that African countries receive from duties and taxes on international trade exceed those of OECD member countries as a percentage of GDP.

The 2020 report of the United Nations Conference on Trade (Unctad) on illicit financial flows and sustainable development in Africa, particularly illicit financial revenues and flows, shows that corporate tax avoidance mechanisms are causing a considerable loss of revenue. Thus, according to the report, developing countries lose a greater part of their tax revenue in this way than developed countries; yet as a percentage of gross domestic product (GDP), the revenues they receive from corporate taxes are already almost equivalent. As a result, one could expect corporate tax revenues to rise, as “common law rates are generally higher in developing countries, but effective rates are sometimes lower than common law rates, due to tax incentives,” the report notes. In any case, given the diversified composition of the tax base in developing countries, it will be possible “to substantially increase the amount of total tax revenue only at the prices of interventions on their various sources, including but not only corporate taxation,” argue trade experts.ILLICIT FINANCIAL FLOWS AND TAX REVENUE According to the report, “global capital flight and losses estimates resulting from tax evasion are presented by region and differ from one region to another. On average, losses due to tax evasion are higher in Central, North and East Africa (2.7% of GDP), than in Southern Africa (about 2% of GDP) and West Africa (2.3% of GDP).” The median rate of capital flight, expressed as a percentage of GDP, ranges from 2.7% in North Africa to 10.3% in West Africa. Experts argue that “when capital flight is significant, tax revenue decreases.” For these to increase, it is necessary, in particular, that “the legal provisions are applied and that the administrative capacity for collection is sufficient” .13% OF THE DIFFERENTIAL BETWEEN THE RECOVERABLE AND THE RECOVERABLE In the case of value added tax, the tax gap, that is to say the difference between the recoverable amount and the amount recovered, can vary greatly between countries. It thus ranges from 13% in South Africa to 92% in the Central African Republic (Uneca, 2019). This is due to special provisions or derogations from value-added tax laws, or collection management problems, including problems with the efficiency, capacity, fraud, or reliability of consumption data. Studies by Coulibaly and Gandhi, carried out in 2018, estimate that by improving tax efficiency and reducing the tax gap, estimated at 20% on average, it would be possible to increase the tax revenues/GDP ratio by 3.9%. 110 BILLION DOLLARS TO BE RECOVERED EVERY YEAR: Convinced that there is still room for manoeuvre to absorb considerable losses, UNCTAD evaluators maintain that “better control of the corruption and effective enforcement of existing laws could largely remedy the situation and contribute to the recovery of an additional 110 billion dollars per year.” In total, capital flight amounted to approximately $88.6 billion per year in 2013—2015. According to the experts' analysis, “the contribution of tax revenue to GDP is lower in African countries and other developing countries than in developed countries (33%).” Only the revenues that African countries receive from duties and taxes on international trade exceed those of the member countries of the Organization for Economic Cooperation and Development (OECD) as a percentage of GDP. The report states that “the recovery rate is limited by the size of the informal sector and the large number of small businesses”. In addition, a taxation system favouring multinational companies that exploit natural resources and pay taxes in the countries where they are headquartered leads to a reduction in taxation, particularly in countries dependent on natural resources. Jean Pierre Malou

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