DIGITAX: Digital Financial Services, Digital ID, & Tax

DIGITAX is a three-year research programme funded by the Bill & Melinda Gates Foundation. With the rapid expansion of mobile money and other digital financial services (DFS), as well as the increased relevance of digital IDs across Africa and other lower-income countries, the DigiTax program aims to generate knowledge and evidence to support governments in overcoming the challenges and leveraging the opportunities presented in two main areas:

The first is the design of appropriate and effective taxation of DFS and its providers, which can impact the development of these markets and financial inclusion.

The second is harnessing the potential that the expansion of DFS and digital IDs presents, in terms of extensive new data, for the improvement of tax collection and administration.

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News and Events:

November 2021
News
Job Opportunity: Post-Doctoral Researcher (DIGITAX)

Closing date for applications: Sunday, 21st November 2021 The International Centre for Tax and Development is seeking a Post-Doctoral Researcher (PDR) to work on the DIGITAX Programme. The PDR will be responsible for leading both quantitative and qualitative research, primarily under the research component “Assessment of the impact of taxes on Digital financial services and…

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October 2021
News
Job Opportunity: Project Research Officer (DIGITAX)

Closing date for applications: Sunday, 31st October 2021 The International Centre for Tax and Development is seeking to appoint a Project Research Officer. The Project Research Officer will work on the DIGITAX Programme and will contribute to innovative and high-quality research on taxing digital financial services and the use of technology in tax administration. The…

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Blogs:

April 2021
by Abimbola AbdurRahman Lekki

In 2016, Nigeria’s Presidential Enabling Business Environment Council recognised that Nigeria should not be left behind in the emerging digitisation of tax processes in Africa. Working closely with the Federal Inland Revenue Service, the council introduced six key electronic solutions. The solutions included e-registration of new taxpayers, e-payment of federal taxes and stamp duties, e-filing…

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Publications:

October 2021
There and Back Again: The Making of Uganda’s Mobile Money Tax
by Adrienne Lees & Doris Akol

Mobile money is widely seen as a powerful tool for enhancing financial inclusion and, potentially, improving the economic well-being of the poor. As the mobile money sector, and its turnover, have grown, certain governments have increasingly viewed mobile money transactions as a potentially convenient tax handle. The resulting tax measures are often controversial and draw…

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July 2021
There and Back Again: The Making of Uganda’s Mobile Money Tax
by Doris Akol & Adrienne Lees

This paper evaluates the appropriateness of the tax policymaking process that led to the introduction, and the later adaptation, of a tax on mobile money transactions in Uganda in 2018. We examine the unusual source of the proposal, how this particular tax diverged from the usual tax policymaking process, and whether certain key stakeholders were…

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Team members

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Laura Munoz
Programme Lead
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Doris Akol
Senior Policy and Engagement Advisor
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Dr Fabrizio Santoro
Research Lead
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Moyo Arewa
Programme and Research Officer
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Christopher Wales
Senior Research Advisor
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Adrienne Lees
Research Associate
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Rhea Millward Thompson
Senior Project Officer

Research Projects:

Current Project
Evidence Review: digital financial services, digital ID systems and tax administration
Project Researchers: Laura Muñoz, ICTD & Moyosore Arewa, ICTD

Digital financial services (DFS) and digital ID systems are becoming ever more prevalent in low- and middle-income countries, and have become critical components of broader tax reform and domestic revenue mobilization (DRM) efforts. These technologies promise to reduce tax compliance costs for taxpayers and lessen the administrative burden on officials, improve access to third-party data,…

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Current Project
How do African tax administrations adopt new technology?
Project Researchers: Giovanni Occhiali, ICTD & Doris Akol, ICTD

Considering the importance of technological progress, the DIGITAX study carried out by our researchers Giovanni Occhiali and Doris Akol promise to inform governments regarding the institutional context in which new technology adoption takes place in Tax Administrations. This paper will also evaluate the parallel reforms within revenue authorities that usually accompanied processes of introducing new technologies, the…

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Current Project
Data, Technology and Tax Administration in Developing Countries: Review of Existing Evidence
Project Researchers: Fabrizio Santoro, Laura Muñoz, Giulia Mascagni & Giovanni Occhiali

Against the recent wave of digitalisation in low-income countries, this review paper wants to take stock of what we know on the main challenges with data and technologies in tax administration. By a thorough review of the existing evidence on the topic, our researchers Fabrizio Santoro, Laura Muñoz, Giovanni Occhiali and Giulia Mascagni aim at exploring the…

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Current Project
Taxing the Financial Sector in Uganda
Project Researchers: Adrienne Lees, ICTD & Chris Wales, ICTD

The DIGITAX programme is supporting governments in the design of financial sector tax strategies that are better aligned with national development goals. Our researchers, Christopher Wales and Adrienne Lees, are working with the Government of Uganda on a project that will inform the development of tax policy for its financial sector. The primary output will be…

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Past Project
The Mobile Money Tax in Uganda: Study of the Policymaking Process
Project Researchers: Adrienne Lees, ICTD & Doris Akol, ICTD

Weaknesses in the tax policymaking process can undermine the quality of tax policy design and related revenue outcomes. Moreover, this can lead to measures that have unintended social and economic consequences. Considering these challenges, our researchers Adrienne Lees and Doris Akol aim to provide important insights for governments regarding how to best approach tax reform by providing an…

Project Outputs

Working Paper
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Current Project
The taxation of DFS in the broader context of taxing the financial and mobile payments sector: A Cross-country study
Project Researchers: Chris Wales, ICTD

Digital delivery of financial services, improving access and efficiency, driving down provider and consumer costs and potentially strengthening financial inclusion, is seen by most governments as a high priority. However, the development of tax systems has sometimes seemed to run in the opposite direction, adding costs to digital delivery, potentially impeding digital roll-out and creating…

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Current Project
Review of evidence on the impacts of digital financial services
Project Researchers: Phil Mader, Institute of Development Studies & Maren Duvendack, University of East Anglia

Effective tax policy on digital financial services (DFS) depends on a clear understanding of the impacts of DFS. Researchers Phil Mader and Maren Duvendack will provide the necessary support to policymakers and governments by clarifying what is known and not known in the literature about the effects of various factors, including taxes, on DFS uptake and…

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Current Project
How to approach the taxation of Digital financial services? A framework to understand and assess tax policies on digital financial services
Project Researchers: Laura Munoz, ICTD, Mick Moore, ICTD & Phil Mader, Institute of Development Studies

How best to tax digital financial services (DFS), namely digital payments? This project seeks to address this question and provide governments with a framework to better understand and approach this challenge. Considering the rapid growth in the use of DFS, including mobile money and other digital payments, governments are confronted with the dilemma of whether…

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