Informal Tax

Image credit: © United Nations Photo

While research has historically focused on formal systems of taxation and user fees, there is mounting evidence of the importance of “informal” taxation for average taxpayers in much of Africa. While lying outside of statutory laws, the “tax-like” payments – which include informal user fees, informal contributions to community development projects, and informal payments to both state and non-state officials – impose a significant burden on many taxpayers, while playing a critical role in financing local public goods and services and shaping broader local governance. Our research aims to map the extent, composition and experiences of these payments, and to understand their implications for livelihoods, fiscal decentralization, service delivery and broader local governance and reform.


June 2018
What Might an Agenda for Equitable Taxation Look Like?
by Wilson Prichard

The notion of tax equity raises difficult questions. There is no single right definition of the term, and it is very hard to measure precisely the distributional effects of taxation and fiscal activities, especially in low-income countries. This brief seeks to clarify definitions, evidence and points of potential disagreement when it comes to tax equity, and puts forward eight key elements of a potential agenda for equitable taxation.

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Tax Unrest Among Market Traders : The Local Side of ActionAid´s International Tax Justice Campaign in Nigeria
by Kas Sempere

Tax justice has become a popular concept, and a number of international tax justice campaigns have exposed aspects such as the unfairness of tax havens and harmful tax breaks. Yet, the idea of tax justice at the local level is less well-known. The impact of campaigns to end tax havens and harmful tax competition may…

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Taxing Africa: Coercion, Reform and Development
by Mick Moore, Wilson Prichard & Odd-Helge Fjeldstad

Taxing Africa is a forthcoming publication, available to pre-order from 1st July 2018. Taxation has been seen as the domain of charisma-free accountants, lawyers and number crunchers – an unlikely place to encounter big societal questions about democracy, equity or good governance. Yet it is exactly these issues that pervade conversations about taxation among policymakers, tax…

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February 2018
Norms, Networks, Power, and Control: Understanding Informal Payments and Brokerage in Cross-Border Trade in Sierra Leone
by Vanessa van den Boogaard, Wilson Prichard & Samuel Jibao

Recent research has cast light on the variety of informal payments and practices that govern the day-to-day interactions between traders and customs agents at border posts in low-income countries. Building on this literature, this paper draws on survey and qualitative evidence in an effort to explore which groups are most advantaged and disadvantaged by the…

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January 2018
Taxation, Property Rights and the Social Contract in Lagos
by Tom Goodfellow & Olly Owen

Major taxation reforms over the past decade have been interpreted as facilitating the transformation of Lagos: once widely seen as a city in permanent crisis, it is now seen by some observers as a beacon of megacity development. Most academic attention has focused on personal income taxation, which comprises the lion’s share of government revenue…

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August 2017
Cross-Border Trade, Insecurity and the Role of Customs: Some Lessons from Six Field Studies in (Post-)Conflict Regions
by Thomas Cantens & Gaël Raballand

Africa, and especially the Sahel, has experienced frequent recurrences of armed conflicts and terrorist acts in the last decade. This paper is based on six field studies, in Chad, Mali, Sudan, Tunisia, Libya and the Central African Republic. It reflects on the governance of trade in border regions during a (post-)conflict situation, exploring the practices…

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March 2017
Informal Taxation in Post-Conflict Sierra Leone: Taxpayers’ Experiences and Perceptions
by Samuel Jibao, Wilson Prichard & Vanessa van den Boogaard

In low-income and post-conflict countries, and particularly in rural areas, citizens often pay a range of ‘taxes’ that differ substantially from statutory policies. These ‘informal taxes’, paid to a variety of state and non-state actors, are frequently overlooked in analyses of local systems of taxation. This is problematic as it leads to misunderstandings of individual…

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September 2016
Community-based and customary taxation in south-central Somalia: Possibilities for hybrid governance and DIALOGUE programming
by Kailee Jordan

This report presents the findings of a feasibility study exploring customary taxation, accountability and governance across south-central Somalia. The aim of the analysis is to provide insights into the design of a new program, ‘DIALOGUE in Somalia through resource mobilization.’ Focus groups and key informant interviews were carried out across seven different case study sites across…

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May 2016
What Have We Learned About Informal Taxation in sub-Saharan Africa?
by Vanessa van den Boogaard & Wilson Prichard

This ICTD Summary Brief is one of six special research synthesis pieces produced at the end of the ICTD’s first five-year funding period in Spring 2016. This one looks at we have learned about informal taxation in sub-Saharan Africa.  

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October 2013
Taxing the Informal Economy: Challenges, Possibilities and Remaining Questions
by Anuradha Joshi, Wilson Prichard & Christopher Heady

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…

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April 2017
by Jalia Kangave

For the past twenty years, Maama Sula (let’s say) has run a small fast-food restaurant in a town called Wandegeya in Kampala, Uganda. She sources the bulk of her supplies from the women in the nearby market. Because her business is relatively well-established, she pays income taxes and Value Added Tax (VAT) to the central…

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November 2016
by Anzetse Were

Last week I participated in a panel discussion at the Kenya Revenue Authority (KRA) Tax Summit on tax policy and economic development. Current fiscal policy is defined by a widening gap between expenditure and revenue generation putting a spotlight on the country’s tax regime and how to expand tax collection. While there are steps that…

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July 2016
by Rhiannon McCluskey

Last week, the Institute of Development Studies hosted its 50th anniversary conference titled “States, Markets and Society“.  As part of the conference, the ICTD hosted a panel on the theme of taxation and fiscal contracts in Africa. The panellists were ICTD’s research directors Wilson Prichard and Giulia Mascagni, our Capacity Building Manager Jalia Kangave, and…

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