Government revenue mobilization remains a major development challenge in sub-Saharan Africa. ECOPA is commissioned by the World Bank with analyzing taxation in Togo and Benin with the aim of producing reform options. The intervention includes the following components:
- Analysis of trends and composition of revenues (by tax and by industry), and estimation of revenue elasticity with respect to GDP growth;
- Tax potential analysis: on the basis of a panel multi-country regression, what is the potential of Togo and Benin in terms of revenue mobilization?
- For each tax instrument (VAT, CIT, PIT, excise duties, etc.), how efficient is tax collection, comparing statutory tax rates with the observed effective tax rates?
- Who pays the taxes? Analysis and distribution of revenue by sector, type of taxpayer and tax instrument.
- Analysis of tax expenditures (incentives and tax and customs exemptions) by industry and by type of taxpayer.
The diagram below summarizes the intervention logic.
For the World Bank (2018).