In a context of high informality, new OECD analysis emphasises that expanding fiscal space, particularly through increased tax revenue, is essential for scaling up the financing of social assistance.
The report, Financing social protection in Senegal (available in French only), explores how much additional financing is required to expand social assistance coverage in Senegal. In 2022, fewer than one in four Senegalese benefited from a social protection programme, with public spending on social assistance accounting for less than 1% of GDP. The report identifies tax reform options to mobilise additional revenues to finance the country’s priority spending reforms, including its social protection system.
The report underscores the importance of boosting the tax-to-GDP ratio, which stood at 19.8% in 2022, with social security contributions accounting for just 0.9% of GDP. Policy options to strengthen domestic resource mobilisation include rationalising tax expenditures and reforming fossil fuel subsidies. The report highlights that sustained economic growth of the formal economy, which translates into higher tax revenue, is critical. It also outlines strategies for the formalisation of informal sector businesses and their workers and enhances contributory schemes to broaden the tax base and improve social protection coverage.
For more information and to access the report, visit: https://www.oecd.org/fr/publications/financement-de-la-protection-sociale-au-senegal_00d67508-fr.html
Queries should be directed to Bert Brys (+33 1 45 24 19 27), Head of the Country Tax Policy Unit, or the CTPA’s Communications Office.
