The African Development Bank Group convened, in April, a regional seminar on Value Added Tax (VAT) digitalization, to discuss ways to strengthen domestic resource mobilization and improve tax system efficiency in West Africa.

The hybrid seminar, “Empowering Smarter VAT Compliance: Innovations and Regional Collaboration in West Africa,” was held at the Bank’s headquarters in Abidjan with support from the Government of Japan under the Policy and Human Resource Development Grant (PHRDG). The seminar convened more than 230 participants from governments, regional institutions, the private sector, and the African Development Bank, both in person and virtually.

In a global context marked by increasing fiscal constraints and a gradual decline in external aid, participants highlighted the importance of domestic resource mobilization to support development. Value Added Tax (VAT), accounts for approximately 30% of tax revenues in many African countries, making it a key component of these efforts, despite its relatively low efficiency, estimated at around 36%.

Opening the seminar, Mr. Lamin Barrow, Director General for West Africa at the African Development Bank Group, emphasized that VAT digitalization represents more than a technical reform. He noted that it contributes to improving transparency, strengthening trust between governments and taxpayers, and enhancing revenue collection efficiency.

Speaking on behalf of the Government of Japan, Mr. Tomoki Nakai, Executive Director representing Japan at the Bank Group, highlighted Japan’s support to domestic resource mobilization through the Policy and Human Resource Development Grant (PHRDG), reiterating the importance of strong institutions, regulatory frameworks, and stakeholder collaboration in advancing VAT digitalization reforms.

Representing the Ivorian tax administration, Mr. Yaya Koné highlighted ongoing reforms in Côte d’Ivoire, including the E-Impôts platform and the rollout of electronic invoicing systems, which aims to improve transaction traceability and tax compliance.

Participants also reviewed country experiences demonstrating the impact of VAT digitalization, building on discussions from a similar seminar held in 2025 that focused on East African experiences. African Development Bank staff also presented lessons from East African countries discussed during the Bank’s 2025 VAT digitalization seminar in Nairobi, where digital VAT systems have contributed to improved compliance, increased revenues, and stronger transaction monitoring.

Across West Africa, countries are advancing reforms at different stages. In Côte d’Ivoire, the E-Impôts platform enables online tax filing and payment, complemented by electronic invoicing systems. In Nigeria, the National Revenue Service Merchant Buyer Solution (NRSMBS) is being rolled out as a real-time electronic invoicing system, starting with large taxpayers.

Ghana is deploying digital tools and data analytics to address its VAT gap, particularly in import monitoring. In Togo, the Revenue Authority (OTR) has introduced online filing and payment systems to strengthen transparency and tax control. Senegal continues to expand its ETAX platform, although technical challenges related to system capacity and interoperability remain.

The seminar also underscored the importance of regional coordination. The ECOWAS Commission noted that VAT contributes approximately 31.4% of regional tax revenues, with a target of 33%, and presented a pilot initiative with Sierra Leone focused on improving VAT collection on cross-border digital transactions.

The West African Tax Administration Forum (WATAF) highlighted its role in supporting fiscal reforms through capacity-building programs, the development of a regional tax data platform, and strengthened coordination between tax and customs administrations.

Private sector participants pointed out that successful VAT digitalization requires systems that are accessible, predictable, and adapted to business realities, particularly for SMEs. Discussions flagged challenges related to compliance costs, connectivity, interoperability, VAT refund delays, and the importance of strengthening taxpayer trust and digital literacy.

Despite progress, participants identified several challenges, including limited digital infrastructure, system interoperability constraints, and capacity gaps among taxpayers, particularly small and medium-sized enterprises. Delayed VAT refunds further impacted business operations and confidence in tax systems.

Looking ahead the conversation shifted on the potential role of emerging technologies, including artificial intelligence, in strengthening tax administration and improving compliance monitoring. Discussions highlighted the importance of establishing appropriate legal frameworks, data protection, and country-specific approaches in the adoption of digital technologies.

The seminar concluded with a shared recognition that VAT digitalization represents a key lever for strengthening domestic resource mobilization in West Africa. To achieve these participants underscored the importance of adopting phased and context-specific approaches, investing in digital infrastructure, building capacity, and fostering collaboration between public and private stakeholders.

• Learn more about the African Development Bank’s work in economic and financial governance here.
• Find Driving Smarter VAT Compliance seminar photos here.