Can you help shape our future priorities? Take a five minute survey now. Survey closes on 8 July.

Working Paper

ICTD Working Paper 102

Review of Tax Treaty Practices and Policy Framework in Africa

Published on 20 January 2020

In recent years, tax treaties concluded by sub-Saharan African countries have become more residence-based with fewer provisions allocating taxing rights to the source countries. This trend is observed in treaties signed with OECD countries in particular.

For countries which are capital importers, as is the case with most African countries, this means that these countries have been slowly ceding their taxing rights over income earned within their jurisdiction. This could be deliberate as the countries try to attract foreign direct investment, or it could be the result of a lack of policy to guide treaty negotiations. In the countries we reviewed, the latter reason seemed to prevail.

From this study, it is apparent that many sub-Saharan African countries do not have a treaty policy in place. The lack of a policy creates ambiguity on matters such as who should be involved in negotiating and concluding tax treaties, which countries are viable treaty partners, and the minimum tax treaty terms that a country should contend for. This provides room for political and elite capture of the negotiation process and leads to the conclusion of treaties without adequate consideration of their technical implications, which could therefore be detrimental to the country.

A well-crafted and properly implemented treaty policy could go a long way in resolving most of the issues faced by sub-Saharan African countries in concluding tax treaties. The lack of capacity and technical understanding of tax treaties makes development of such treaty policy and model treaties an uphill task for most sub-Saharan African countries. Thus, there is need for training and capacity building in the area of tax treaties, and help in the formulation of a tax treaty policy and model. This training and help can come both from experts within the countries themselves and through external support from other countries.

Cite this publication

Mutava, C. N. (2019) Review of Tax Treaty Practices and Policy Framework in Africa, ICTD Working Paper 102, Brighton, IDS

Authors

Catherine Ngina Mutava

Publication details

published by
ICTD and IDS
language
English

Share

About this publication

Related content

Working Paper

Mining Legitimacy: Governing the Politics of Resource-Based Green Industrial Policy

IDS Working Paper 623

3 July 2025

Opinion

The power of communities during civic space closure in Central America

Rocío Elizabeth Ramírez Argueta, Oficial de programas y proyectos, COMCAVIS TRANS

& 3 others

24 June 2025

Opinion

El poder de las comunidades frente al cierre del espacio cívico en Centroamérica

Rocío Elizabeth Ramírez Argueta, Oficial de programas y proyectos, COMCAVIS TRANS

& 3 others

24 June 2025

Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.