The taxation of employment income in African countries: Findings from a new dataset

Abstract

AbstractThis study presents new evidence on the taxation of employment income in African countries. Utilising a unique dataset, we summarise trends in the policy design of personal income taxes and other mandatory contributions between 1995 and 2020. We analyse tax rates, thresholds and reform patterns, before comparing cross‐country effective tax rates and the progressivity of employment income taxes. We find that, inter alia, reform is infrequent, top marginal tax rates are lower than in the OECD and in 25% of African countries, an individual earning a wage equal to the PPP$1.90/day poverty line would be liable to pay income tax.