Developing countries often lack tax information and enforcement capacity necessary to effectively implement instruments of a modern tax system, such as VAT, income taxes and others. An alternative strategy to increase tax compliance, and thus revenue, in these countries may depend on the capacity of policymakers to harness individual’s civicmindedness, social norms, reciprocity and cultural…
Very little is known about why taxpayers in sub-Saharan Africa (SSA) remit their taxes. In collaboration with the Eswatini Revenue Authority (SRA), this study implements a nationwide randomised controlled trial nudging more than 20,000 income tax payers with behaviourally-informed mailings. This study attempts to shed new light on the drivers of SSA taxpayers’ compliance, and…
Read moreNational tax administrations in sub-Saharan Africa have undergone considerable reform in recent decades. In a number of respects, they are, on average, more reformed and more efficient than tax administrations in other low income regions of the world. They have responded effectively to a number of major challenges. However, we now have evidence from benchmarking…
Read moreThe pandemic is in many ways a crisis of governance. Its magnitude and mitigation are determined by the nature of policy responses and crisis management by leaders and governments, and existing socioeconomic inequality has led to a disproportionate impact on some groups. The pandemic has created a set of unique challenges that underscore the need…
Read morePrior to Covid-19, Eswatini faced numerous developmental challenges with stagnating poverty and economic growth. Lockdown measures were introduced from 17 March, including schools closures, limitations on public and private gatherings, the suspension of non-essential travel within cities, and border closures. Economic activity has been damaged further by South Africa’s strict containment measures and the closure…
Read morePrior to Covid-19, Rwanda was booming, with economic growth exceeding ten percent in 2019. Strong growth has been accompanied by significant improvements across various human development indicators, such as poverty reduction and rising life expectancy. The pandemic has placed much of this progress in jeopardy. Exports and tourism have been hurt by border closures and…
Read moreNon-filing refers to taxpayers who fail to submit a tax declaration, thus becoming ghosts in the eyes of tax authorities. It is a widespread phenomenon in sub-Saharan Africa, and has a number of detrimental fiscal effects. Non-filing has been largely unexplored in the literature, which focusses more on active filers. The overall aim of this…
Read moreThis paper considers whether the ‘Amount B’ proposal currently being negotiated in the Inclusive Framework, for the attribution of fixed remuneration for the ‘routine’ distribution and marketing activities of MNE affiliates, may offer a useful template for the re-working of the widely used ‘transactional net margin’ transfer pricing method (TNMM). The TNMM has for years…
Read moreAn important part of every country’s development process is the building of a social contract in which citizens pay tax and, in turn, receive public goods and services. Evidence suggests that this is associated with the establishment of a norm of tax payment and a belief that non-payment is wrong. We exploit a new, nationally…
Read moreThis FACTI Background Paper considers six sets of international tax norms: tax treaties (often known as double taxation agreements), transfer pricing rules, mutual assistance agreements between states, state-state and investor-state tax dispute resolution mechanisms, coercive mechanisms that oblige states to adopt international tax norms or face sanctions from powerful states, and finally the embryonic framework…
Read moreIn this chapter, Moore and Prichard provide two different kinds of answers to the question of how governments of developing countries can increase tax revenues. First, they discuss seven potential revenue sources that governments of developing countries tend to use less than they should. Mining, tobacco and alcohol, the incomes and wealth of rich people,…
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