African governments are turning to technology to solve a massive tax problem. With foreign aid drying up, nations are scrambling to generate revenue from their own economies but roughly 85% of workers operate in the informal sector, making traditional tax collection nearly impossible.
Digital tools now offer a solution. Countries like Rwanda use electronic billing machines that push tax compliance down the supply chain, while Kenya’s eTIMS system sends sales data directly to tax authorities in real time. However, the approach carries significant risks.
When Ghana introduced a levy on mobile transactions, users simply returned to cash, undermining financial inclusion efforts and forcing the country to cancel the initiative.
For tech to work, Africa needs reliable infrastructure and systems that don’t punish the poor. The challenge is balancing digital innovation with the human reality of how most people actually live and work.