African Governments Mine Tax Data to Sharpen Policy, But Evidence Gaps Remain
South Africa, Uganda and Zambia are using secure data labs to analyse tax records and shape policy decisions, but the evidence base for continent-wide impact remains incomplete.
Africa's fiscal space is tightening. Bilateral aid fell by nearly a quarter in 2025—the steepest annual decline in official development assistance history—while sovereign debt interest payments now consume 27% of government revenues on average, up from 19% in 2019. As external funding dries up, African governments face mounting pressure to fund their own development. But precision is essential: they need to know which tax policies work, which incentives deliver, and how fiscal choices ripple through their economies.
Administrative tax data—the anonymised filings, returns and transaction records that revenue authorities already hold—offers one of the most powerful tools for answering those questions. Three countries have begun building the infrastructure to use it.
Secure Labs, Shared Learning
South Africa, Uganda and Zambia have each established secure research data labs where researchers work with anonymised tax records under strict confidentiality protocols. All three received technical support from the United Nations University World Institute for Development Economics Research (UNU-WIDER), which provides expertise, facilitates knowledge-sharing, and ensures that data, research agendas and findings remain the property of the institutions using them.
"Administrative tax data is one of the most powerful tools for answering questions about which tax policies work and how fiscal decisions distribute their consequences."
The model is designed to protect privacy while unlocking insight. Researchers access anonymised material in secure environments, not in the open; each country retains ownership and control of its own findings.
Evidence in Practice: South Africa's Decade
South Africa's National Treasury Secure Data Facility, part of the Southern Africa Towards Inclusive Economic Development programme, has operated for over a decade. The accumulated research has already informed multiple policy shifts.
Analysis revealed that the corporate tax system was quietly favouring debt over equity financing—nudging firms to borrow more than they otherwise would, making companies and the economy more fragile in downturns. This finding informed corporate tax restructuring in Budget 2020.
Research on the Employment Tax Incentive, a wage subsidy aimed at young workers in a country where nearly 60% struggle to find work, uncovered a more complicated picture of impact than policymakers had anticipated. The evidence supported a decision to expand the subsidy during the COVID-19 pandemic.
Other work has examined the economic multiplier effect of government spending and tax cuts, underscoring the importance of fiscal strategy in job creation and growth.
The Broader Picture
Uganda and Zambia are earlier in their lab journey but are beginning to produce evidence that feeds into budget decisions, labour market programmes and social protection policy. The approach reflects a shift in how African governments think about governance: not by assumption or precedent, but by rigorous scrutiny of the tax system they already operate and the people within it.
However, the reporting indicates that sources remain divided on the extent to which these efforts have yielded continent-wide policy wins or whether the benefits remain concentrated in the three pioneer countries. The picture is still incomplete, and the scale of impact is harder to measure at the regional level than in individual case studies.