Local government taxation and tax administration in Africa

The main objective of the project is to provide better evidence on how to promote effective, efficient and legitimate local government tax systems and tax administrations in low income countries, based on comparative studies of local taxation in selected sub-Saharan African countries. Local government revenues generally contribute to a very modest share of total national public revenues in poor countries. Whereas central government taxes are dominated by indirect taxes and by narrowly based income taxes, local government revenues are heavily reliant on broad based direct taxes (mainly property taxes and taxes on businesses), various levies, licenses, fees and user charges. Thus, while central government taxes affect directly only few people, local government taxes affect many directly, including the poor. Local taxation may, thus, be particularly important to fostering positive linkages between taxation, responsiveness and accountability because local taxes are more visible and broad based, owing to the simple fact of proximity.