Departmental Papers

Tax Expenditures in Sub-Saharan Africa

By Todd Schneider, Sandhya Rajyam Garimella, Li Liu, Simon Naitram, Can Sever, Felix F. Simione, Irena Jankulov Suljagic, Qianqian Zhang

October 7, 2025

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Format: Chicago

Todd Schneider, Sandhya Rajyam Garimella, Li Liu, Simon Naitram, Can Sever, Felix F. Simione, Irena Jankulov Suljagic, and Qianqian Zhang. "Tax Expenditures in Sub-Saharan Africa", Departmental Papers 2025, 006 (2025), accessed November 2, 2025, https://doi.org/10.5089/9798229023887.087

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Disclaimer: The views expressed herein are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Tax expenditures in sub-Saharan Africa (SSA) are less well understood than in other regions and in some cases represent a significant element of fiscal policy. Tax expenditures involve provisions within tax systems that reduce tax liability relative to a benchmark and can include tax exemptions, deductions, credits, or preferential rates, and can impact revenue collection, equity, and governance. This paper seeks to shed light on tax expenditures in sub-Saharan Africa (SSA), draw attention to the presence of significant data gaps, transparency, and governance issues in the region, and build on studies by other institutions and agencies. It reviews how the IMF has engaged on this issue in recent years and highlights the importance of tax expenditures to macro-fiscal stability in the current liquidity-constrained environment. It also offers some practical recommendations to policymakers and external stakeholders for advancing work in this area.

Subject: Expenditure, Fiscal policy, Public financial management (PFM), Revenue administration, Revenue mobilization, Tax expenditures, Tax incentives, Taxes

Keywords: Africa, Compliance costs, Corporate income tax, Global, Governance, IMF tax expenditure mission, IMF team, Public financial management, Public policy evaluation, Revenue administration, Revenue mobilization, Sub-Saharan Africa, Sub-Saharan Africa context, Sub-Saharan Africa country, Sub-Saharan Africa region, Tax expenditures, Tax incentives, Value added tax

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