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September 2022

Unpacking ‘Tax Morale’: Distinguishing Between Conditional and Unconditional Views of Tax Compliance

by Wilson Prichard

There is mounting evidence that strengthening tax morale can have important benefits in encouraging quasi-voluntary tax compliance, building political support for reform, and supporting tax bargaining between citizens and governments. However, the literature has been plagued by an often vague, and overly aggregated, understanding of the concept of tax morale. This has consequences for our…

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September 2022

Mobile Money Taxation and Informal Workers: Evidence from Ghana’s E-Levy

by Nana Akua Anyidoho, Max Gallien, Mike Rogan & Vanessa van den Boogaard

In recent years, governments in lower-income countries have increasingly introduced specific taxes on mobile money transfers as a means to raise revenue. These are often explicitly promoted as a way of taxing informal economic activity, but critics have noted their potential negative impact on lower-income groups. Ghana’s electronic transfer levy (E-levy), introduced in May 2022,…

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August 2022

Income Tax Payers Are Not All the Same – A Behavioral Letter Experiment in Eswatini

by Fabrizio Santoro

Very little is known about why taxpayers in sub-Saharan Africa pay their taxes. This article reports results from a nationwide randomized controlled trial in Eswatini, nudging more than 20,000 income tax payers with behaviorally-informed mailings, building on deterrence, facilitation, and trust paradigms. This study is the first to target three different categories of taxpayers at…

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August 2022

The VAT in practice: equity, enforcement, and complexity

by Giulia Mascagni, Roel Dom, Fabrizio Santoro & Denis Mukama

The value-added tax (VAT) is meant to be an efficient and self-enforcing tax on consumption. Yet, being a rather sophisticated tax, the VAT can also be complex and costly to administer. By examining the case of Rwanda, this paper assesses the extent to which the VAT’s potential materialises in the context of a lower-income countries….

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August 2022

Do tax policies discriminate against female traders? A gender framework to study informal marketplaces in Nigeria

by Imaobong Akpan & Ma Josep Cascant-Sempere

Scholars have long debated formalizing the informal sector through taxation, but how do these processes affect gender inequalities? Our study in Nigerian markets contributes a gender framework to the equitable taxation literature on formalization. The study draws on a survey of 451 traders in 12 markets, key informant interviews, and ethnographic research in four markets…

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August 2022

Visual Nudges: How Deterrence and Equity Shape Tax Compliance Attitudes and Behaviour in Rwanda

by Fabrizio Santoro & Giulia Mascagni

The empirical evidence on the drivers of compliance is expanding quickly, but there is less evidence from low-income countries. Mass-media communication channels are a cheap option that budget-constrained revenue administrations can use to communicate with taxpayers. However, very little is known about the effectiveness of such tools in improving compliance. This paper starts to address…

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June 2022

Property Taxes and State Incapacity in Pakistan

by Muhammad Mujtaba Piracha

This book shows how Pakistan’s inability to collect taxes reflects a broader disconnection between the state and its citizens, which translates into growing fiscal deficits, poor service delivery, increasing socio economic inequalities and low democratic accountability. Through extensive primary fieldwork, which included original interviews with tax bureaucrats and policymakers, detailed archival work and analysis of…

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June 2022

No smoking gun: tobacco taxation and smuggling in Sierra Leone

by Giovanni Occhiali & Max Gallien

Objective To evaluate the common industry claim that higher tobacco taxation leads to higher levels of smuggling, particularly in a limited state capacity setting. Design This paper evaluates the effects of a tobacco tax increase in Sierra Leone on smuggling by using gap analyses. Its models are based on multiple rounds of the Demographic and…

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June 2022

Should Governments Tax Digital Financial Services? A Research Agenda to Understand Sector-specific Taxes on DFS

by Mary Abounabhan, Laura Munoz, Giulia Mascagni, Wilson Prichard & Fabrizio Santoro

Low-income countries are facing strong pressure to bring in more revenue at home. With digital financial services (DFS) rapidly expanding across Africa and other low-income countries a growing number are therefore considering new taxes on DFS. In light of the heated debate over DFS taxes, this paper explores the rationale for these taxes and their…

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June 2022

Small Nets for Big Fish? Tax Enforcement on the Richest – Evidence from Uganda

by Fabrizio Santoro & Ronald Waiswa

Appropriately taxing the richest is a priority for every government, even more so in Africa, where higher revenue mobilisation is needed to fund growth. In Uganda, the revenue authority launched a specific unit to monitor the tax affairs of the richest individuals. Thanks to a close collaboration with the Uganda Revenue Authority (URA), we evaluate…

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June 2022

Enablers, Barriers and Impacts of Digital Financial Services: Insights from an Evidence Gap Map and Implications for Taxation

by Philip Mader, Maren Duvendack, Adrienne Lees, Aurelie Larquemin & Keir Macdonald

Digital financial services (DFS) have expanded rapidly over the last decade, particularly in sub-Saharan Africa. They have been accompanied by claims that they can alleviate poverty, empower women, help businesses grow, and improve macroeconomic outcomes and government effectiveness. As they have become more widespread, some controversy has arisen as governments have identified DFS revenues and…

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