Use of Research Evidence essential in formulation of fair tax systems in Africa

Focusing on four countries; Tunisia, Nigeria, Uganda, and Zambia, the study explores the link

between the strategic deployment of research evidence to shape tax policy by civil society

organisations (CSOs) and the extent of governments’ reliance on this research evidence in

designing tax policies.

the continent’s high levels of inequality.

This would touch on areas such as relative taxation of wealthy to poor households, multinational companies, formal and informal sectors etc – ultimately ensuring that high income earners pay their fair share so that groups/individuals of lower income families do not carry their nation’s tax burden.

Last year, the Tax Justice Network through the 2021 edition of the State of Tax Justice

revealed that countries globally are losing $483 billion in tax annually to global tax abuse

affecting lower income countries more severely than higher income countries. While higher

income countries lose more tax in absolute number, their tax losses represent a smaller share

of their revenues.

In Nigeria, for instance, the study investigates the widely debated issue on how best to

approach the taxation of informal workers. CSO research in the country reveals that

compliance for tax paying in the informal sector remains low since the policies in place do not

ensure revenues collected benefit the population as per expectations.

In Zambia, the study helps understand what determines URE when there are competing

mandates and priorities (health care spending versus revenue) amongst policymakers from

different governmental departments.

The Uganda case study helps understand how to increase the URE by policymakers in a

relatively exclusive (technocratic) tax policymaking process. While in Tunisia, the study

explains that the policymaking process has usually been through a top-down approach with

participation from senior civil servants and in some cases international donor institutions and

special interest groups.

To help shape reforms around tax fairness and better policies formulation, there is a need for

policy makers to adopt URE. Through key findings from the four case studies, the report finds

this has only partly been realised.

As such, it makes a series of recommendations that urge CSOs and researchers to involve

policy makers in all the research processes to allow URE’s uptake. Research evidence should

be clear, concise, easy to read, accessible, deemed credible and timely to the policymaking

processes. It should target specific actors with tailored information, engage policy makers

early in the design and, finally, maintains a non-partisan reputation.

Both TJNA and IEJ hope that the findings from the report will stimulate the much-needed

additional studies regarding how CSOs undertake and use research in their advocacy. Further,

they hope that through the provided recommendations, the civil society will begin to better

understand how to use evidence effectively to drive policy advocacy initiatives.

Ishmael Zulu, Policy Officer – Tax and Equity at TJNA says:

“Our study provides empirical evidence around domestic tax policies and international tax

policies, areas that have not been explored by other studies. This approach has powerfully

illustrated research evidence role in implementing effective policies. It is important that we

apply the lessons identified by the study in future, to improve tax formulation processes for

the benefit of the research community and the public in general. When our systems are in

order, our economies will be able to support sustainable development and be resilient even

during unprecedented events such as the Covid-19.”

Busi Sibeko, Researcher at IEJ says:

“There is an increasing interest in fair and equitable taxation and how revenue can be directed

towards public benefits. This interest has prompted a rapidly expanding focus on the crucial

role of civil society in seeking to shape the tax reform agenda locally, nationally and

internationally. To this end, we believe the recommendations laid out in this report will equip

the CSOs with the most effective tools to advocate for policies lessening inequalities.”