- The African Union has projected that Africa could lose about R9.2 trillion in tax revenue due to the outbreak of the coronavirus
- The AU added that there is also the possibility of a 30% fiscal loss and this could leave numerous African countries broke
- Reports emerging suggest that increased imports in Africa have led to an increase in tax revenues from duties on goods and services
A new African Union (AU) report has revealed that Africa is likely to lose an estimated R9.2 trillion in tax revenue due to the coronavirus epidemic.
The report also shows a possible 30% loss of fiscal revenue for the same reason, leaving African countries at the mercy of international borrowers.
Briefly.co.za understands that the report also analyses the impact of the pandemic and shows that several countries could end up with increased debt.
High imports in Africa have led to an increase in tax revenues from duties on goods and services.
This, per the report, accounted for 53.7% of tax revenues in the year 2017, but the situation has changed as a result of declines imports, following the outbreak of COVID-19.
Business and Financial Times reports that Africa’s tax to GDP ratio stands at a low rate of 17.2%, compared to that of Latin American countries with 22.8% and OECD countries with 34.2%.
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