This paper develops a theoretical framework that links the statutory Value-Added Tax (VAT) rate to its effective collection efficiency
via three margins—registration, compliance, and enforcement—and derives testable predictions about how each margin is shaped
by structural features common to African economies (large informal sectors, weak tax administrations, and concentrated production
structures). Calibrating the model shows that collection efficiency is highly convex in enforcement capacity and that small
improvements in third-party information can generate revenue gains equivalent to large rate increases. Using newly assembled panel
data for 45 African countries over 1995-2022, we construct a comprehensive efficiency ratio—actual VAT revenue divided by
potential revenue at the statutory rate—and document wide dispersion: the median country collects only 38 % of potential, with a 10-
90 percentile range of 12 %–64 %. Empirical tests guided by the theory reveal that (i) a one-unit increase in the World Bank’s
Administrative Tax Capacity index raises the efficiency ratio by 7–9 percentage points; (ii) mineral-resource dependence and
informality each reduce efficiency by 3–5 percentage points; and (iii) the introduction of electronic fiscal devices offsets roughly half
of the negative efficiency effect of informality. Counter-factual simulations indicate that if all African countries attained the region’s
75th percentile of enforcement capacity, aggregate VAT revenue would rise by USD 26 billion annually—equivalent to 1.3 % of
regional GDP—without any rate changes. Our findings suggest that policy priorities should shift from rate adjustments to closing
registration gaps and strengthening audit technologies, particularly in resource-rich economies.