Domestic Revenue Mobilization in Guinea-Bissau

Selected Issues Papers, August 1, 2025

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Domestic Revenue Mobilization in Guinea-Bissau

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Bibliographic details

• Authors: Nour Bouzouita
• Published: August 1, 2025
• Series: Selected Issues Papers
• DOI: https://doi.org/10.5089/9798229018869.018

Summary

• This paper quantifies Guinea-Bissau’s tax potential using a stochastic frontier model and investigates the underlying sources of untapped revenue.
• The analysis benchmarks performance against structural peers and distinguishes between structural constraints and policy or institutional gaps.
• It finds that Guinea-Bissau has significant scope to increase domestic revenue by broadening the tax base, enhancing compliance, and strengthening core tax functions.
• Targeted, sequenced reforms in administration and policy could help close the tax gap and support more sustainable, resilient public finances.

Key findings

• Significant untapped revenue potential exists in Guinea-Bissau as identified by a stochastic frontier model.
• Main drivers of low revenue mobilization include:
  • high informality
  • administrative inefficiencies
  • a fragmented tax system
  • weak enforcement
• Closing the tax gap requires both addressing structural constraints and implementing policy/institutional reforms.

Drivers of low revenue mobilization (detailed)

• High informality limits the taxable base.
• Administrative inefficiencies reduce effective collection and compliance.
• A fragmented tax system hampers coherent policy and administration.
• Weak enforcement contributes to revenue leakage and low compliance.

Policy recommendations and reform priorities

• Broaden the tax base through measures that bring informal activity into the tax net.
• Enhance compliance via improved taxpayer services, registration, and monitoring.
• Strengthen core tax administration functions to reduce administrative inefficiencies.
• Sequence reforms to prioritize high-return measures that are administratively feasible and politically realistic.

Methodology

• Tax potential quantified using a stochastic frontier model.
• Comparative benchmarking against structural peers to isolate policy-amenable gaps from structural constraints.

Content in this bundle

• Tax Revenue in GNB and Peers
  • Tax Revenue in GNB and Peers (Markdown version)
  • Tax Revenue in GNB and Peers (PDF)