Dr. Merima Ali is an ICTD researcher with research interest in private sector development and taxation. She is also a Senior Researcher at the Christian Michelsen Institute (CMI) and a Research Assistant Professor at Syracuse University.
Ali has published a number of papers for the ICTD, including: “Information Technology and Fiscal Capacity in a Developing Country: Evidence from Ethiopia”, “People’s Views of Taxation in Africa” and is currently working on a related research project about the effect of Electronic Sales Register Machines on tax enforcement and tax outcomes.
Why are you particularly interested in the issues private sector development and taxation?
My interest in private sector development, particularly of small firms, emanates from the potential role that small businesses have both in terms of employment generation and poverty reduction in many African countries. In general, there are a lot of micro- and small-scale firms in Africa than large firms. These often employ the poor and vulnerable, particularly women. Promoting the growth of these small businesses has been at the center of policy discussion among African nations for many years, because of their potential in generating more employment to the urban poor, and I’ve looked at some ways of accomplishing this.
Another important research area closely related with private sector development, which I am interested in is taxation. Governments in Africa generally have limited capacity to mobilize resources through taxation. Although private businesses are potential sources of tax revenue in Africa, collecting taxes from businesses is very cumbersome. This is because; effective tax systems involve gathering detailed earning information on a large number of taxpayers, which is very costly. Failure to collect taxes properly on businesses not only reduces governments’ revenue, but could also negatively affect the competitiveness of businesses. In some of my research, I have looked at the role of information technology (IT) in helping reduce costs of tax collection and increase tax compliance.
You’ve published a number of research focusing on Africa and specifically on Ethiopia, what are some of the interesting findings you were able to come up with in your research?
The first research, People’s Views of Taxation in Africa, looks at the determinants of tax compliance attitude in four African countries (Uganda, Kenya, Tanzania and South Africa) using the round 5 Afrobarometer data. In the study we find that respondents in South Africa and Kenya are more likely to express a tax compliant attitude if they perceive that enforcement makes evasion more difficult. We also find evidence that those who are more satisfied with public service provision are more likely to support the government’s right to tax in all the four countries.
The other research, which I am currently involved in, Information Technology and Fiscal Capacity in a Developing Country: Evidence from Ethiopia, explores the role of IT in tax administration in a setting with limited fiscal capacity. It particularly investigates the impact of Electronic Sales Registry Machines (ESRM) on tax collection in businesses in Ethiopia. ESRMs issue receipts and automatically reports registered sales of businesses to the tax authority via a network (on daily basis). This enables the tax authority to monitor reported revenues on a day-to-day basis. Using administrative data from the Ethiopian Revenue Authority on more than 30,000 firms, the study shows that the machine has increased value-added tax (VAT) payment by about 14%, an effect largely driven by firms that are likely to evade taxes in the absence of the ESRMs.
In your opinion, what role does/can the ICTD research play in the development policies/discussions in Africa and other developing countries?
I believe the ICTD is playing an important role both in the research and policy discussions about taxation in Africa and other developing countries. The annual conference hosted by ICTD in different African cities is very important in helping promote discussion about relevant taxation issues among the academia and policy makers.
How can ICTD research be made more relevant and accessible to practitioners and policymakers?
Although ICTD’s annual conference is important to make ICTD research accessible to practitioners and policy makers, ICTD can make more use of other conferences that are being hosted in different African countries to promote its works and reach the relevant audience. For example, ICTD had a session as part of the Ethiopian Economic Association conference, which was held in July in Addis this year. I and other ICTD researchers presented our work on taxation on Ethiopia. There was a lot of interest on the works that we presented from the audience, and we were able to get comments from relevant tax experts in Ethiopia. This was a good start, and it would be nice if ICTD could continue to use such kind of platforms.
To what extent has doing research for the ICTD helped you grow as a researcher?
ICTD has put me in contact with researchers from different countries that work primarily on taxation in Africa. ICTD’s annual conference is also very helpful to meet people that work both in academia and policy and get good comments on past or ongoing research.
See Merima’s full profile here.