Predatory taxation

TWENTY-FIVE IMF programmes, and at least 17 high-powered tax reform commissions, task forces and donor-funded programmes later, the country still finds itself struggling to raise revenue. Once again, another government has announced its intention to raise the tax-to-GDP ratio. The pattern of repeated failure over decades should be a moment for pause and introspection — both for the government and the IMF. The need for additional revenue cannot be denied. Against an estimated tax revenue potential of around 20-22 per cent of GDP, government revenue totals 12.5pc of GDP, significantly below the average for low- and middle-income countries as a whole. Looked at from another perspective, the country is unable to fund its substantial spending needs with regards to public service delivery, ballooning pension liabilities or building climate resilience.