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    Innovation Village | Technology, Product Reviews, Business
    You are at:Home»Digital»Bento’s White Paper highlights the importance of digital tax collection in Africa

    Bento’s White Paper highlights the importance of digital tax collection in Africa

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    By Smart Megwai on October 31, 2023 Digital, Tax

    Bento, a pan-African digital payroll and HR Management platform with tax capabilities, has released a groundbreaking White Paper titled “Statutory Remittances in Africa.” This paper dives into the taxation systems of 53 African countries and emphasises the benefits of adopting digital payroll systems for accurate income tax collection and other mandatory deductions.

    Income tax plays a vital role in African economies, contributing about 33% of total income. However, the White Paper highlights the significant differences in tax rates across African countries, making tax collection challenging for authorities.

    Taxes fund essential services like education, healthcare, infrastructure, and defense. The informal sector, which operates outside of government regulation and doesn’t have taxes deducted from wages, represents a significant portion of the economy. Bento’s White Paper suggests that digital tax collection could enhance this sector’s contribution to Domestic Resource Mobilisation.

    In a global economic slowdown, African nations can’t rely solely on foreign borrowing. Illicit financial outflows cost the continent up to $60 billion annually. Bento believes that addressing this situation is crucial.

    The White Paper also examines Value Added Tax (VAT), revealing variations in its implementation across African countries. It offers recommendations to empower African governments to use technology-driven approaches for sustainable economic growth. Some countries have already adopted digital tax collection to improve accuracy and reduce compliance costs.

    Ebun Okubanjo, Co-Founder and CEO at Bento, emphasises the potential of effective taxation to transform Africa, reduce reliance on foreign aid, and improve economic self-sufficiency. Digital solutions, like Bento’s software, can help governments generate and submit tax reports electronically, reducing administrative burdens and increasing revenue through better tax collection.

    The White Paper concludes that innovative digital tax collection methods can boost Africa’s tax-to-GDP ratio, improve citizens’ lives, and bring it in line with other regions like Latin America and OECD countries.

    Related

    Bento Africa White Paper
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    Smart Megwai
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    Smart is a Tech Writer. His passion for educating people is what drives him to provide practical tech solutions which helps solve everyday tech-related issues.

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