In the streets of Dakar, Thiès, and Kaolack, thousands of traders, artisans, and transporters pay fees, tickets, and licenses every day. Yet, the idea persists that the informal economy largely escapes taxation. This perception, firmly entrenched in public debate, does not stand up to scrutiny. Those not registered in the national tax system already contribute significantly, but in diffuse, fragmented ways, rarely visible in budget statistics.

However, a crucial distinction must be made. The contributions paid by these actors are primarily local levies, collected by municipalities, towns, market management committees, or certain intermediary bodies. They do not take the form of major state taxes such as income tax, corporate tax, or customs duties, which directly fund the national budget. It is precisely this difference that perpetuates the confusion between the absence of national taxation and the complete absence of contributions.

Research conducted by the International Centre for Tax and Development in Ghana and Tanzania shows that informal operators regularly pay municipal taxes, market stall fees, business licenses, and daily charges. In Accra, a field survey revealed that over 80% of unregistered traders made at least one mandatory payment to a local authority or a recognized tax collector. These sums, while outside the central tax system, do indeed constitute a mandatory contribution.

In Senegal, the Directorate of Forecasting and Economic Studies estimates that the informal sector represents approximately 97% of economic units and over 40% of the gross domestic product. In urban markets, vendors pay daily fees for stall occupancy, cleaning fees, and dues to management committees. At bus stations, intercity and suburban transport drivers pay parking fees, loading fees, and union dues. These financial flows primarily fund municipal budgets or those of local organizations. Very little of this money reaches the national treasury.

This fragmented tax system partly explains the misunderstanding. The contributions paid do not take the form of an annually declared tax or a progressive tax based on actual income. They are local, often paid in cash, and sometimes collected by delegation. They therefore escape national tax accounting and traditional indicators of tax burden. Yet, for the households concerned, these are indeed mandatory expenses that reduce an already precarious income.

The regressive nature of these levies raises questions. Small businesses frequently pay fixed amounts, independent of their actual revenue. A fruit vendor or a phone repairman can pay several thousand CFA francs per week without benefiting from social protection or easier access to credit. Conversely, some formal businesses benefit from exemptions, incentives, or optimization mechanisms that reduce their effective contribution to the state budget.

This discrepancy fuels a sense of unfairness. Municipal services remain inadequate in many markets, infrastructure is deteriorating, and revenue traceability remains limited. The lack of transparency regarding the use of funds undermines trust and reinforces the perception of an unbalanced system.

For African tax administrations, the question is no longer whether the informal economy contributes, but how to streamline this contribution and better integrate local and national taxation. The African Tax Administration Forum has been emphasizing for several years the need to simplify presumptive tax regimes, improve registration, and strengthen transparency in local tax collection. The issue extends beyond public revenue. It concerns the coherence of the tax system and the quality of the social contract.

Better documenting these flows, clarifying the distribution between local authorities and the central government, harmonizing levies, and offering tangible services in return are priority areas. The gradual digitization of municipal payments, piloted in some Senegalese municipalities, could reduce losses and make financial processes more transparent. However, this modernization must be accompanied by a visible improvement in infrastructure and broader access to social protection.

The idea that the informal economy doesn't pay taxes is therefore more of a simplification than a reality. It already contributes, primarily at the local level, through a multitude of mandatory levies. The real questions concern fairness, coordination between levels of government, and the allocation of these contributions. Transforming a patchwork of municipal fees into a coherent and balanced tax system remains one of the major challenges for public policy in Africa.