African Tax Administration Forum (ATAF) 2024 Environmental Tax Handbook

The ATAF Environmental Tax Handbook is a practical guide for policymakers seeking to use taxation as a tool for environmental protection and sustainable economic growth. It examines the limitations of traditional regulatory approaches and highlights the role of environmental fiscal reform in supporting responsible environmental practices. It explores policy frameworks, best practice, and case studies that demonstrate how African countries can use tax instruments to address environmental challenges while promoting revenue generation. This handbook aims to provide policymakers with practical insights into the selection and implementation of environmental tax instruments tailored to the African context.

TaxDev researchers authored the following chapters:

•    Chapter 2: The African Context - This chapter focuses on the African context, examining the role of environmental taxation in addressing the continent’s unique environmental and economic challenges. It highlights the pressures of climate change, deforestation, pollution, and biodiversity loss, emphasising how well-designed tax policies can support sustainable development. The chapter examines existing environmental tax frameworks across African nations, discussing their effectiveness, implementation challenges, and the need for policies tailored to local economic structures and governance capacities. Case studies illustrate how African countries are leveraging environmental taxes to drive behavioral change, generate revenue, and promote a just transition toward greener economies.

•    Chapter 7: Reforms to African Motoring Taxation - This chapter explores reforms to motoring taxation in Africa, focusing on how tax policies can address environmental concerns, improve transport infrastructure, and generate revenue. It examines challenges such as fuel subsidies, outdated vehicle fleets, and rising emissions, proposing tax reforms like fuel excise adjustments, emissions-based vehicle taxation, and incentives for cleaner transport alternatives. The chapter also highlights case studies from African countries implementing motoring tax reforms, emphasizing the need for balanced policies that support economic growth while promoting environmental sustainability.