The IMF says the country has made progress in mobilising domestic revenue, with its tax-to-gross domestic product (GDP) ratio reaching 16.4%, a level above some low-income peers. However, the report stresses that this progress is not yet sufficient to support long-term development or provide the stable financing needed for public services.
The Fund highlights several structural weaknesses that continue to undermine performance. These include extensive tax exemptions, weak value-added tax collection and a large informal economy.
Tax exemptions alone are estimated to reduce government revenue by up to 3% of GDP annually, significantly limiting fiscal space. At the same time, repeated and often uncoordinated tax changes have created a complex system that increases compliance costs for businesses and reduces predictability.
The IMF warns that this fragmented approach has prioritised short-term revenue gains over a coherent long-term strategy.
A major challenge remains the size of Burundi’s informal sector, which accounts for more than a third of economic activity. This reduces the government’s ability to broaden the tax base and enforce compliance.
Compared with regional peers such as Kenya and Uganda, Burundi has been slower to formalise its economy. The report links this to deeper structural issues, including limited access to electricity, weak infrastructure and low financial inclusion.
The IMF emphasises that effective taxation is central to state-building. Countries that sustain tax revenues above 15% of GDP tend to achieve stronger growth and more resilient institutions.
In Burundi’s case, maintaining and improving this threshold consistently remains a challenge, constraining its development trajectory. To address these issues, the IMF recommends a comprehensive reform agenda focused on simplifying tax policy, reducing exemptions and improving administration.
Digital initiatives such as the e-KORI tax system are seen as important steps toward modernisation, but the report cautions that technology alone will not be sufficient without stronger governance and enforcement. The IMF concludes that sustained political commitment and a clear long-term strategy will be essential to expand the tax base, reduce informality and support inclusive economic growth.
–IMF/ChannelAfrica–
