ICTD Working Paper 30

The advance of decentralisation efforts in Africa has brought with it expanded discussion of local government taxation, and the potential for tax reform to spur broader state building and governance gains. However, while this literature has acknowledged the importance of local politics and context, it has remained largely grounded in a formal understanding of local tax systems, rather than an understanding of the often informal day-to-day realities of sub-national taxation. This paper correspondingly provides a ground level view of market and small business taxation in two local government areas in Ghana’s disadvantaged northern region. Doing so reveals a system shaped by ingrained informal practices that are grounded in existing social relationships and collective norms. These informal practices sometimes foster greater equity and responsiveness than formal rules, but in other cases serve to reinforce existing inequalities. We conclude by arguing that existing approaches to reform are likely to be undermined by a failure to appreciate the socially embedded realities of local government taxation, and we propose possible reform strategies that ‘work with the grain’ of existing practices.


Wilson Prichard

Wilson Prichard is an Associate Professor at the University of Toronto, a Research Fellow at the Institute of Development Studies, and Chief Executive Officer of the International Centre for Tax and Development. His research focuses on the relationship between taxation and citizen demands for improved governance in sub-Saharan Africa.

Vanessa van den Boogaard

Vanessa van den Boogaard is a Research Fellow at the ICTD and a Senior Research Associate at the Munk School of Global Affairs and Public Policy at the University of Toronto. She completed her PhD thesis on informal revenue generation and statebuilding in Sierra Leone, and has ongoing research on the topic in the Democratic Republic of the Congo and Somalia. Vanessa leads the ICTD’s new programme on civil society engagement in tax reform and co-leads the research programme on informal taxation.
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