Indirect taxation refers to taxes on consumption collected on behalf of a government. These include VAT, sales taxes and excise duties. Figure 13 shows that during the last decade indirect taxation as a share of GDP has decreased marginally in Africa. This trend is noticed when countries are weighted according to the size of their economies. Countries that have made significant use of indirect taxation are: Burkina Faso, Burundi, Djibouti, Kenya, Lesotho, Mauritania, Mauritius, Morocco, Mozambique, Rwanda, Senegal, South Africa and Zambia. As can be seen in Figure 13, low income countries in Africa seem to make more use of indirect taxation than slightly richer countries

Upper-middle income countries, i.e. countries with income per capita comprised between USD 3 856 and USD 11 905 per year, are converging with OECD countries in terms of share of indirect taxes in national income. Lower income countries have done remarkably well: they have closed the gap with upper middle income countries since 1996. However, lower middle income countries still have some margin for scaling up their efforts to increase their VAT. This Outlook’s country surveys report that Angola is planning to introduce a VAT in 2010, while Liberia and São Tomé and Principe are studying the desirability of introducing a VAT system.