Highlights of The 7th High Level Policy Dialogue and 21st General Assembly of the West African Tax Administration Forum (WATAF)

Introduction

The 7th High Level Policy Dialogue and 21st General Assembly of the West African Tax Administration Forum (WATAF) was convened at the Foreign Affairs Academy, Tower Hill, Freetown, Sierra Leone, from 15th to 19th September 2025 under the theme: “Financing Development Through Effective Tax Systems.”

The conference brought together policymakers, heads of revenue administrations, representatives of civil society, the private sector, regional and international institutions, and other stakeholders to deliberate on strategies for strengthening Domestic Resource Mobilization (DRM) in West Africa. Discussions centered on building effective, transparent, and fair tax systems capable of financing national development in the face of declining donor support.

The following summarizes the main point raised during discussions:

1. Resource Mobilization for National Development

1. There is an urgent need for revenue administrations to scale up efforts in mobilizing domestic resources to finance national development, especially as external donor support continues to decline.
2. To achieve this, revenue administrations must conduct thorough diagnostics to identify and address key challenges affecting DRM, including weak capacity, low compliance, and inefficiencies in the tax system.
3. Participants stressed the need for Public Financial Management (PFM) reforms to be implemented in close collaboration with all relevant stakeholders, specifically the private sector, ensuring accountability and fiscal discipline.

2. Strengthening Institutions and Building Capacity

1. Underscored the importance of capacity building for revenue administrations, policymakers, Members of Parliament, and the judiciary to ensure effective tax legislation, enforcement, and dispute resolution.
2. The digitization of tax systems, including e-invoicing and mobile payment platforms, was recognized as essential for enhancing compliance, improving efficiency, and ensuring transparency.
3. Revenue administrations were encouraged to strengthen collaboration with technology providers, particularly in taxing the digital economy, cryptocurrencies, and new business models.
4. Peer learning and regional cooperation are vital for sharing experiences, avoiding costly mistakes, and ensuring the successful rollout of reforms.

3. Fairness, Transparency, and Citizen Engagement

1. Participants reaffirmed that tax systems must be fair, transparent, and accountable to sustain the social contract between governments and citizens.
2. The efficient and transparent use of public resources is critical in building tax morale, which remains low in many African countries and specifically WATAF Member States. Citizens are more willing to comply when they see tangible benefits from their tax contributions.
3. CSOs and the media have an important role to play in ensuring accountability, fairness, and inclusivity in tax systems.
4. Taxpayer education and proactive communication are necessary to close the information gap, simplify tax processes, and build trust between revenue administrations and the public.

4. Tax Policy and Informality

1. The informal sector, which dominates many African economies, presents significant challenges for taxation. Governments were encouraged to develop policies and laws tailored to the realities of the informal sector, while reducing the disproportionate tax burden on vulnerable groups by focusing on High Net Worth Individuals (HNWIs).
2. There is a need to formalize the informal sector through simplified systems, taxpayer categorization, and innovative compliance measures such as tax stamps to curb smuggling.
3. Participants stressed that tax policies must strike a balance between raising revenue and fostering an enabling environment for investment, entrepreneurship, and industrial growth.

5. Collaboration and Information Sharing

1. Strong collaboration was emphasized as a cornerstone of successful reforms, within countries, across institutions, and between nations.
2. There is a call for improved information-sharing mechanisms, particularly regarding land data, real estate transactions, vehicle registration, and beneficial ownership, which are essential for combating tax evasion and illicit financial flows.
3. Regional platforms such as WATAF, ECOWAS and WAEMU provide valuable opportunities for experience-sharing, capacity building, and harmonization of tax practices.
4. Cross-border tax evasion and aggressive tax avoidance must be tackled through regional and international cooperation, including the alignment of domestic tax laws with global standards adapted to local contexts.

6. Tax Incentives, Governance, and Accountability

1. Participants highlighted the importance of evaluating and monitoring tax incentives to ensure they meet development objectives and do not erode the revenue base.
2. Incentives such as tax holidays should be well-targeted, transparent, and time-bound. Tools and expertise for assessing the impact of tax incentives should be developed at both national and regional levels.
3. Participants stressed that tax policy must be stable and predictable, avoiding frequent changes that create uncertainty for businesses and investors.
4. Integrity, transparency, and accountability must remain at the heart of revenue administrations’ operations to build trust, attract investment, and foster voluntary compliance.

7. Way Forward

• Strengthen collaboration among revenue administration, Ministries of Finance, CSOs, the private sector, and regional institutions.
• Prioritize digitization and modernization of tax systems to enhance compliance and efficiency.
• Invest in capacity building for revenue officials and policymakers to strengthen the entire tax ecosystem.
• Foster taxpayer engagement through proactive communication, transparency, and simplification of tax systems.
• Formalize the informal sector while ensuring inclusivity and fairness of the tax system by focusing on High Net Worth Individuals.
• Promote peer learning and regional cooperation for effective DRM reforms.
• Develop monitoring tools for tax incentives and align national policies with international best practices while adapting them to African realities.
• Creating a business friendly environment for private sector.