Strengthening tax cooperation with Africa for sustainable revenue mobilisation

The document examines the G20/OECD Inclusive Framework's 'Two-Pillar Solution' to tax challenges from the digitalisation of the economy, highlighting how current global tax fragmentation allows multinational corporations to avoid taxes. It argues that African and least-developed countries suffer disproportionate revenue losses as a share of GDP and are underrepresented in negotiations. The brief criticizes the agreement for a high turnover threshold that limits the number of taxable companies and for a minimum corporate tax rate of 15% that some African nations find too low. It recommends increasing African participation, moving negotiations to a neutral UN forum, and providing technical and financial support to ensure equitable implementation.

• African and least-developed countries (LDCs) suffer the most significant tax revenue losses relative to their GDP due to weak taxing rights in bilateral treaties and limited financial and technical capacity in tax administrations.
• The disparity in tax revenue loss is severe, with some countries like Guyana, Chad, Guinea, Zambia, and Pakistan losing between 5% and 8% of their GDP, compared to 0.61% to 1.06% in larger economies like Germany, France, and China.
• African countries generally maintain higher average corporate tax rates than European countries, with Africa's regional average at 28.5% compared to Europe's 19.99%.
• The Inclusive Framework is criticized for poor representation of Africa, with only 23 of the 55 African Union members participating in the project.
• The agreement's scope is viewed as biased toward the US because the minimum tax rate only applies to companies with annual sales of at least €750 million, potentially limiting the pool to around 100 companies.
• Certain developed nations, including the US, UK, France, Italy, Spain, and Austria, secured a side deal allowing them to keep their digital services taxes (DSTs) for two years, while other countries are expected to repeal theirs.
• Specific countries resisted the agreement based on national interests: Nigeria due to its 30% corporate tax rate, Kenya to protect its digital services tax, and Ireland to maintain its 12.5% rate.

APA

South African Institute of International Affairs (2021). Strengthening tax cooperation with Africa for sustainable revenue mobilisation. https://saiia.org.za/research/strengthening-tax-cooperation-with-africa-for-sustainable-revenue-mobilisation/

Chicago

South African Institute of International Affairs. Strengthening tax cooperation with Africa for sustainable revenue mobilisation. 2021. https://saiia.org.za/research/strengthening-tax-cooperation-with-africa-for-sustainable-revenue-mobilisation/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Strengthening tax cooperation with Africa for sustainable revenue mobilisation |date=15 December 2021 |url=https://saiia.org.za/research/strengthening-tax-cooperation-with-africa-for-sustainable-revenue-mobilisation/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2021strengthening, author = {{South African Institute of International Affairs}}, title = {{Strengthening tax cooperation with Africa for sustainable revenue mobilisation}}, institution = {South African Institute of International Affairs}, year = {2021}, month = dec, url = {https://saiia.org.za/research/strengthening-tax-cooperation-with-africa-for-sustainable-revenue-mobilisation/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }