Johannesburg, 29 September – 3 October 2025 — The African Union (AU) held its 8th Session of the Specialized Technical Committee (STC) on Finance, Monetary Affairs, Economic Planning and Integration in Johannesburg. The meeting placed taxation, domestic resource mobilisation (DRM), and illicit financial flows (IFFs) at the core of Africa’s strategy to close its growing health-financing gap.
Africa’s Shift from Aid to Domestic Resource Mobilisation
With health aid to Africa declining by 70% since 2021, AU member states agreed that stronger reliance on domestic revenues is the only sustainable path forward.
Key tax-related strategies highlighted during the STC include:
- Broadening the tax base to increase equity and efficiency.
- Implementing health taxes (tobacco, alcohol, sugar-sweetened beverages) to fund health services.
- Curbing illicit financial flows (IFFs), which cost Africa nearly US$89 billion annually.
- Strengthening public financial management (PFM) to ensure effective use of tax revenues.
This signals a decisive move away from aid dependency toward fiscal autonomy driven by taxation.
Health Taxes as a Dual Dividend
Excise taxation was a recurring theme. Ministers and experts stressed the revenue potential of tobacco, alcohol, and sugary drink taxes, while acknowledging their health benefits in reducing non-communicable diseases.
There was also discussion about expanding taxation to new nicotine products such as e-cigarettes, which are currently under-regulated. However, challenges such as smuggling and regressivity were raised, pointing to the need for regionally coordinated tax policy across Africa.
Illicit Financial Flows and Global Tax Governance
South Africa, hosting the meeting and preparing to chair the G20 in 2025, emphasized the link between fair international tax rules and Africa’s ability to fund health systems.
Tackling IFFs was described as a fiscal necessity, not only a governance issue. With annual losses surpassing many national health budgets, the AU urged member states to strengthen tax transparency, exchange of information, and enforcement mechanisms.
The Role of ATAF and Other Institutions
Although the AU provided the political platform, institutions such as the African Tax Administration Forum (ATAF)and UNECA were highlighted as essential technical partners.
- ATAF, which signed a 2023 MoU with the AU Commission, contributes to tax administration reforms, capacity building, and global tax negotiations.
- During the STC, ATAF co-hosted a side event on health taxes, underscoring the technical steps required to design and implement effective excise regimes.
- While not the headline focus, ATAF’s expertise in areas such as IFF enforcement and excise design is critical for turning AU commitments into actionable national policies.
Expected Outcomes from the AU STC 8th Session
The meeting is expected to deliver two key outputs:
- A Ministerial Declaration setting out political commitments on DRM, tax reforms, IFFs, and health financing.
- A Continental Framework for Health Financing Acceleration, which will guide African countries in aligning their taxation strategies with health spending priorities.
Why This Meeting Matters for Africa’s Tax Policy
- Tax sovereignty: By shifting focus from aid to DRM, Africa is asserting greater fiscal independence.
- Health taxes: Excises on harmful products are being reframed as both revenue tools and health policy measures.
- IFFs and global taxation: The AU is linking international tax justice to domestic fiscal space, aligning with ongoing UN tax convention negotiations.
- Implementation gap: The success of these commitments will depend on whether national administrations, supported by ATAF and other partners, can deliver technically sound reforms.
The 8th AU STC meeting in Johannesburg marked a turning point in framing taxation as the backbone of Africa’s health financing strategy. The discussions made clear that the continent’s future health systems will depend less on donor support and more on excise reforms, robust domestic resource mobilisation, and tackling illicit financial flows.
Institutions like ATAF provide the technical expertise to translate these continental declarations into practice, but the burden now rests on national tax administrations to operationalise reforms in their 2026 budget cycles.
