Fragmented value added tax (VAT) systems across the region continue to distort trade, increase compliance costs and undermine cross-border business activity.

This was the consensus at a high-level forum in Abidjan convened by the African Development Bank.

At the event, tax administrators and policy-makers warned that without coordinated digitalisation and alignment of national VAT regimes under the Economic Community of West African States (ECOWAS) framework, ambitions for a truly integrated regional market could remain elusive.

With a January 2027 deadline to domesticate the ECOWAS VAT Directive, the pace of reform is increasingly seen as decisive.

Delays risk entrenching trade frictions, weakening investor confidence and limiting the region’s ability to fully leverage intra-African trade under broader continental integration efforts.

The West African Tax Administration Forum has, in this context, called for accelerated digitalisation of VAT systems, describing current inefficiencies as a major constraint on both revenue mobilisation and economic growth.

“Digitalisation is the single most transformative lever for improving VAT performance across West Africa. Without it, we will continue to face leakages, inefficiencies and limited compliance,” said WATAF Executive Secretary, Jules Tapsoba, during a panel session on VAT reform.

VAT remains one of the most significant sources of domestic revenue across the region, yet its performance continues to be undermined by structural weaknesses.

These include the dominance of the informal sector, weak tax compliance culture, limited digital infrastructure and poor coordination between customs and domestic tax administrations.

The result is a system characterised by persistent revenue leakages, delays in VAT credit reimbursements and mounting liquidity pressures for businesses operating across borders.

While several countries have begun deploying technology-driven solutions—ranging from electronic invoicing and online taxpayer registration to automated filing and payment systems progress remains uneven.

This lack of uniformity, stakeholders argue, is itself a barrier to integration, creating multiple compliance regimes for businesses operating across jurisdictions.

The push for harmonisation is, therefore, not only about improving tax efficiency but also about removing structural bottlenecks to trade.

Tapsoba urged member states to align national VAT frameworks with the ECOWAS Directive adopted in July 2023, stressing that harmonisation, combined with digitalisation, will be essential to ensuring fair competition and enabling a functional common market.

Beyond system upgrades, he pointed to the need for deeper institutional reforms, including faster VAT refund processes, stronger audit and verification mechanisms, improved customs valuation systems and the operationalisation of joint audit teams between tax and customs authorities.

Equally critical, he noted, is the development of robust data systems and regional databases to support evidence-based policy-making, alongside sustained investment in capacity building for tax officials.

The Chief Governance Officer at AfDB, Eline Okudzeto, reinforced the case for reform, drawing lessons from East Africa, where digital VAT systems have improved compliance but continue to face challenges around integration and coordination.

Her remarks underscored a broader reality: technology alone cannot resolve systemic inefficiencies without parallel reforms in governance, data sharing and institutional alignment.

Other speakers, including officials from the African Tax Administration Forum and ECOWAS, echoed the need for stronger cross-border cooperation, warning that fragmented tax systems risk undermining years of progress toward regional economic integration.

WATAF, which continues to support member states through technical assistance and capacity development, emphasised that the region’s broader fiscal transition—from reliance on border taxes to more efficient domestic revenue systems—will depend heavily on how effectively VAT reforms are implemented.

For policy-makers, the message from Abidjan was clear: without urgent and coordinated action, the gap between West Africa’s integration ambitions and its tax systems could widen, with significant implications for trade, revenue and long-term economic cohesion.