How can the G20 support Africa's tax agenda?

The document evaluates G20 progress on international taxation, specifically the OECD/G20 Inclusive Framework and the Two-Pillar Solution, noting that while African countries have gained representation—including the African Union's permanent G20 seat—significant gaps remain in technical capacity and revenue generation. It argues that African countries, with a tax-to-GDP ratio of 16%, must prioritise Domestic Resource Mobilisation (DRM) to fund Sustainable Development Goals. The brief recommends that future G20 presidencies focus on digitalising tax administrations, implementing a global carbon taxation system, and adopting more progressive tax policies to fund social protection for the informal sector, which comprises 85.8% of jobs in Africa.

• African countries have a significantly lower tax-to-gross domestic product (GDP) ratio of 16%, compared to 20% in Asia-Pacific, 22% in Latin America and the Caribbean, and 34% in OECD countries, making Domestic Resource Mobilisation (DRM) a key priority for achieving Sustainable Development Goals.
• Base erosion and profit shifting (BEPS) practices result in substantial revenue losses for African governments, estimated between $100 billion and $240 billion annually, which represents 4% to 10% of global corporate tax revenue.
• The Two-Pillar Solution aims to address the digitalisation of the economy; Pillar One reallocates residual profits of multinational enterprises (MNEs) to market jurisdictions, while Pillar Two establishes a 15% global minimum effective tax rate for MNEs with consolidated revenues exceeding €750 million.
• Despite the admission of the African Union (AU) as a permanent G20 member, African representation in the Inclusive Framework remains low, with only 23 countries having joined as of November 2023.
• African countries face significant implementation hurdles regarding international tax rules due to a lack of internal capacity to interpret complex legislation, specifically regarding the calculation of GLoBE income and the application of the Qualified Domestic Minimum Top-up Tax.
• The high prevalence of the informal sector in Africa, accounting for 85.8% of total jobs, creates difficulties in financing social welfare programmes, suggesting a need for digital financial services and progressive taxation of the wealthiest to fund protection for the poorest.
• African countries advocate for a global carbon taxation system, including taxes on fossil fuel trade, maritime transport, and aviation, to generate finance for climate-positive investments based on climate vulnerability relative to emissions.

APA

South African Institute of International Affairs (2024). How can the G20 support Africa's tax agenda? https://saiia.org.za/research/how-can-the-g20-support-africas-tax-agenda/

Chicago

South African Institute of International Affairs. How can the G20 support Africa's tax agenda? 2024. https://saiia.org.za/research/how-can-the-g20-support-africas-tax-agenda/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=How can the G20 support Africa's tax agenda? |date=30 January 2024 |url=https://saiia.org.za/research/how-can-the-g20-support-africas-tax-agenda/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2024how, author = {{South African Institute of International Affairs}}, title = {{How can the G20 support Africa's tax agenda?}}, institution = {South African Institute of International Affairs}, year = {2024}, month = jan, url = {https://saiia.org.za/research/how-can-the-g20-support-africas-tax-agenda/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }