Mobilizing Domestic Revenue to Rebuild Fiscal Space in Senegal
Challenge
Improving fiscal management is an important priority for Senegal to transform the country into an emerging market. The Senegalese authorities called on the IMF to help them address core weaknesses in tax administration such as an outmoded and fragmented organizational structure, insufficient automation and ineffective audit and enforcement.
Approach
Funded by the Revenue Mobilization Trust Fund, the IMF in 2011 launched a targeted program focused on modernizing the organizational structure, strengthening the tax administration functions, improving compliance controls for large and medium-sized taxpayers, and ensuring robust income tax support for all core processes. The IMF's Regional Technical Assistance Center for West African francophone countries provided complementary assistance to set up medium-sized taxpayer units and improve audit capacity.
Impact
Senegal’s tax administration's head office and regional directorates now have a sound organizational structure. There are full-fledged large and medium-sized taxpayer offices that account for a large proportion of tax collection; electronic filing procedures are in place. These changes have helped Senegal maintain a tax revenue ratio of 20 percent of the gross domestic product, outperforming regional peers.