Taxing the Informal Economy: Challenges, Possibilities and Remaining Questions

Authors: Anuradha Joshi, Wilson Prichard & Christopher Heady
Publisher: ICTD
Date: October 2013

Abstract:

ICTD Research In Brief 3

We are pleased to present the third in our new publication series, ICTD Research in Brief – two-page summaries of our working papers edited to capture the main policy messages and aimed at policy makers, tax administrators, fellow researchers and anyone else who is big on interest and short on time. We hope you enjoy it.   

There is growing interest in taxing the informal economy in developing countries. This paper examines the case for giving it greater priority, and suggests that policymakers and researchers should focus less on technical design issues, and more on strategies to encourage compliance, and to increase political and institutional incentives for reform.