Tax experts across Africa want governments to expand digital payment systems for collecting money from citizens and businesses. The African Development Bank and Kenya hosted a meeting in Nairobi on June 17 to discuss better ways to collect value-added taxes. Officials from East African countries shared ideas about using computers and internet systems to make tax collection easier and more honest.
Kenya reported strong results from its digital tax programs last year. The country collected 11.1 percent more tax money in 2024 compared to 6.4 percent growth the year before. Kenya uses electronic filing systems and computer programs that help people pay taxes without visiting government offices. Uganda also saw major improvements after starting its electronic receipt system in 2021, which boosted VAT collections by 50 percent.
African countries face a major challenge because most workers operate outside the formal economy. These informal businesses represent 60 to 80 percent of all jobs and create up to 40 percent of economic activity across the continent. Tax officials want to create simple systems that bring these small businesses into the official tax system without making payments too complicated or expensive.
Many African nations lack money and technology needed to build modern tax collection systems. Experts suggest that governments should partner with private companies to develop these digital platforms. Each country must design systems that match its specific needs and technical capabilities rather than copying solutions from other nations.
Kenya reported strong results from its digital tax programs last year. The country collected 11.1 percent more tax money in 2024 compared to 6.4 percent growth the year before. Kenya uses electronic filing systems and computer programs that help people pay taxes without visiting government offices. Uganda also saw major improvements after starting its electronic receipt system in 2021, which boosted VAT collections by 50 percent.
African countries face a major challenge because most workers operate outside the formal economy. These informal businesses represent 60 to 80 percent of all jobs and create up to 40 percent of economic activity across the continent. Tax officials want to create simple systems that bring these small businesses into the official tax system without making payments too complicated or expensive.
Many African nations lack money and technology needed to build modern tax collection systems. Experts suggest that governments should partner with private companies to develop these digital platforms. Each country must design systems that match its specific needs and technical capabilities rather than copying solutions from other nations.
