Effective Tax Burden on Mobile Network Operators in Africa
February 10, 2025
The analysis of the tax and parafiscal burden borne by mobile phone operators was initiated in 2022 by Grégoire Rota-Graziosi (FERDI and CERDI, UMR UCA, CNRS, and IRD) and Fayçal Sawadogo (CERDI, UMR UCA, CNRS, and IRD). Their article, “The Tax Burden of Mobile Network Operators in Africa,” published in Telecommunications Policy, analysed these taxes in 25 African countries.
LATEST OUTPUTS
↪ A study of the effective tax burden on mobile operators in 29 African countries assessed the average effective tax rate, taking into account both general and sector-specific taxes. The results show that the tax burden on these operators is particularly high, mainly due to the specific levies applied to them. This raises concerns about the effects on investment, market expansion, and the affordability of services for consumers. The study calls for a balanced approach between public resource mobilisation and the need to maintain a tax framework conducive to the development of the telecommunications sector — a key driver of digital inclusion in Africa.
↪ A R Shiny application was developed to replicate the analysis or adjust parameters for further simulations.
LATEST OUTPUTS
↪ The journal International Tax and Public Finance published the article “The Regressivity of CIT Exemptions in Africa”, in which Alou Adessé Dama, Grégoire Rota-Graziosi, and Fayçal Sawadogo analyse investment tax incentives in 44 African countries.
Main findings:
In 20 of the countries studied, incentive systems are regressive: less profitable companies are taxed more, while the most profitable benefit from lower taxation — resulting in a regressive tax system. This is mainly due to the widespread use of corporation tax exemptions as the primary incentive mechanism.
The authors recommend the adoption of corporation tax credits, which are fairer and potentially more effective tools for encouraging investment.
↪ A new application on the regressivity of corporate income tax (CIT) exemptions in Africa is now available. This application, developed by Alou Adessé Dama (FERDI), Grégoire Rota-Graziosi, Faycal Sawadogo, and Mohamed Aliou Tounkara (CERDI, UMR UCA, CNRS and IRD), supports decision-making on tax exemptions and evaluates the progressivity or regressivity of national tax systems for companies by adjusting the tax burden based on the companies' gross profitability.
