Tax collection in sub-Saharan Africa (SSA) performs poorly, with a tax/GDP ratio of about 15% –this has severe repercussions for service delivery, growth and state-building. The ratio in high-income countries is 35%. Resource-constrained tax authorities in SSA are transitioning towards a new tax era, and implementing innovative compliance strategies such as ‘tax nudges’ – communication…
Read moreIncreasing emphasis is being placed on the need for low income countries to collect more tax revenue. In parallel, the need for equitable tax systems is also gaining prominence. While African countries have made remarkable progress in increasing tax collections, taxation in many African countries is inequitable in various respects. For example, many revenue authorities…
Read morePoor compliance is one of the key factors behind persistently low tax-to-GDP ratios in developing countries. Two dimensions of non-compliance that have been widely studied are under-reporting and non-filing (i.e. failing to submit a tax declaration altogether). However, there is a third and largely under-researched dimension of non-compliance: nil-filing. It refers to taxpayers who are…
Read moreTax treaties are agreements through which two countries agree to assign and restrict taxing rights on economic activities that span both countries. They were traditionally concluded mainly to avoid double taxation and create a favourable investment climate. However, in recent years, tax treaties concluded by sub-Saharan African countries – with OECD countries in particular –…
Read moreWhen judged by the standard criteria for effective tax administration, as carried out under the Tax Administration Diagnostic Assessment Tool (TADAT), the Malawi Revenue Authority (MRA) appears to perform very poorly, even by the standards of low-income countries. These observations are in conflict with the facts that the MRA (a) is rather effective at capturing…
Read moreThe rapid growth of the digital economy in many African countries poses serious challenges to traditional tax regimes. Revenue authorities must protect their revenue base without hindering the development and use of new technologies or the business community’s involvement in the e-marketplace. Two international taxation rules pose a challenge to taxing the global digital economy….
Read moreFuel subsidies in Nigeria are enormous. At last estimate, the state subsidises gasoline to the tune of USD 3.9 billion — almost double the entire health budget. Subsidies exist because the government fixes the price of gasoline for consumers below the international price and uses government resources to pay for the difference. They were first…
Read moreThis study explores how small business owners talk about their tax responsibility, especially in non-enabling institutional contexts. It identifies two main types of tax responsibility discourses amongst these business owners: (1) duty-based and (2) rights-based. The duty-based talks see taxation primarily as the citizens’ responsibility to governments, which should always be fulfilled unconditionally, while rights-based…
Read moreA demand-supply framework has been developed and applied to Tanzania to explore the link between democratisation, economic liberalisation and the use of tax exemptions to fund political parties’ electoral campaigns. In Tanzania, the demand for this type of money has increased since one-party rule was abolished in 1992. This led to reduced state subsidies to…
Read moreTax evasion is typically very hard, if not impossible, to measure. In the case of trade flows however, it is possible to capture it thanks to “missing imports”: the difference between the total value of exports recorded by country A to country B and the total value of imports of country B from country A….
Read moreUganda embraced decentralisation as a system of governance in the early 1990’s. The success of decentralisation was pegged on the capacity of the local governments to mobilise their own revenues in order to fulfill their responsibilities. Before its suspension in 2005 and eventual abolition in 2008, graduated tax constituted a dominant source of local revenue….
Read moreThe global consensus to treat multinational enterprises (MNEs) as separate entities for tax purposes requires them to act at arm’s length in the transfer of goods and services, especially setting the prices of such transfers. This means that, although in practice they are integrated entities under the ownership and control of a parent company, operating…
Read more