Cross-Border Exchange of Information and Tax Revenue Mobilization in Africa

Tax evasion and avoidance generate distortions in tax systems and cause significant revenuelosses for African economies. International cooperation is one of the most effective methods of combating tax evasionand tax avoidance. As such, many countries are participating in global initiatives toward the exchange of informationbetween national administrations for tax purposes. This paper provides the first empirical evidence on the revenueeffects of tax-related exchange of information for African countries. The regressions are carried out on a sample of 54African countries on data from 1990–2020. The findings indicate that the exchange of information for tax purposesbetween national tax jurisdictions has a positive and statistically significant impact on tax revenue. Theestimation results show that exchange of information could increase tax revenue collection by a magnitude ranging from5 to 19 percent. These findings reiterate the importance of international cooperation for combating tax evasion andstimulating tax collection in Africa.