Presumptive Taxation in Sub-Saharan Africa: Experiences and Prospects

Helaway Tadesse and Günther Taube

No 1996/005, IMF Working Papers from International Monetary Fund

Abstract: Considering the need to broaden the tax base and to increase tax revenue in an efficient, equitable, and cost-effective manner, this paper analyzes presumptive taxation methods and their application in sub-Saharan Africa. Presumptive taxation involves simple techniques to capture income that frequently escapes conventional taxation. Presumptive taxation methods could be used more intensively in sub-Saharan Africa, and presumptive taxes on imports, withholding schemes, and graduated business license fees are most effective in raising additional tax revenue in a way commensurate with efficiency, equity, and administrative expediency. Also, intensified presumptive taxation will need stronger institutional capacity in tax administration.

Keywords: WP; income tax; tax liability; taxable income; tax authorities; withholding tax; tax authority; presumptive taxation; medium-scale enterprise; down payment; trade tax; tax administration capacity; license tax; tax levy; imputed income; overburdened tax authorities; Personal income; Presumptive tax; Income and capital gains taxes; Income tax systems; Tax administration core functions; Africa; Sub-Saharan Africa; Asia and Pacific (search for similar items in EconPapers)
Pages: 49
Date: 1996-01-01
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Citations: View citations in EconPapers (5)

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