Tax Administration and Compliance

Image credit: © Uganda Revenue Authority, Vanessa van den Boogaard

Many of the challenges low-income countries face in mobilising domestic resources are related to tax administration as much as tax policy. Our research on this theme encompasses all aspects of tax administration, from technology adoption, to data management and strategies for collecting revenue from different types of taxpayers. Tax compliance is a key focus, as low-income countries struggle with widespread evasion, corruption, and limited administrative capacity. Our research on compliance includes survey-based studies of taxpayers’ perceptions and attitudes, case studies, and large-scale field experiments.

Join our mailing list

Publications:

Perception of Taxpayers and Tax Administrators towards Value Added With holding Tax in Zimbabwe
by Simbarashe Hamudi

Value added tax (VAT) is a key tax for generating revenue in Zimbabwe and all African states, and for financing the budget in African countries. However, the revenue authorities are not collecting large amounts of VAT for various reasons, including ineffective administration and tax evasion. The value added withholding tax (VAWHT) system brings the merits…

Read more
Can ICTs increase tax compliance? Evidence on taxpayer responses to technological innovation in Ethiopia
by Giulia Mascagni, Andualem T. Mengistu & Firew B. Woldeyes

The widespread introduction of ICTs and digitised data management systems is one of the most important developments amongst African tax administrations in recent years. However, very little evidence is available on their effectiveness to increase compliance and on how taxpayers respond to these changes. This paper starts filling this gap by reporting three sets of…

Read more
Perception of Taxpayers and Tax Administrators Towards Value Added Withholding Tax in Zimbabwe
by Simbarashe Hamudi

This study attempts to evaluate the perception of taxpayers and tax administrators towards value added withholding tax (VAWHT) policy in Zimbabwe, and to identify ways of improving VAWHT administration to increase collection of revenue from value added tax.

Read more
June 2021
The Role of Social Influence in Enforcing Tax Compliance: Experimental Evidence from Nigeria
by Adedeji Adeniran, Mma Amara Ekeruche & Chukwuka Onywkwena

Economic development is linked with increased state capacity including the ability to mobilise domestic tax resources. For many developing countries, high levels of informality are a major constraint in this regard. Yet, economic incentives like changing the tax rate or increasing the filling and audit rate can be ineffective in a highly informal economic structure….

Read more
Taxing Agricultural Income in the Global South: Revisiting Uganda’s National Debate
by Graeme Stewart-Wilson & Ronald Waiswa

The issue of agricultural taxation has almost completely disappeared from scholarly and policy agendas in recent decades. And, yet, agriculture continues to be taxed very lightly in much of the Global South – even though it contributes substantially to GDP. In some cases, light taxation of agriculture may be an intentional policy goal. Evidence from…

Read more
The Economic Impact of the Pandemic in Rwanda: An Analysis of Firm-level VAT Data
by Giulia Mascagni & Adrienne Lees

There are substantial differences in the spread of the pandemic and the policy response to it between high and low-income countries (LICs). In terms of case numbers, the pandemic has affected high and middle income countries (HICs and MICs) much more severely than LICs: deaths per million people have remained typically well below 1 in…

Read more
The VAT in Practice: Equity, Enforcement and Complexity
by Giulia Mascagni, Roel Dom & Fabrizio Santoro

There are substantial differences in the spread of the pandemic and the policy response to it between high and low-income countries (LICs). In terms of case numbers, the pandemic has affected high and middle income countries (HICs and MICs) much more severely than LICs: deaths per million people have remained typically well below 1 in…

Read more
Taxing Agricultural Income in the Global South: Revisiting Uganda’s National Debate
by Graeme Stewart-Wilson & Ronald Waiswa

The issue of agricultural taxation has almost completely disappeared from the scholarly and policy agendas in recent decades. And yet, agriculture is taxed very lightly despite contributing substantially to GDP across many Global South countries today. In some cases, light-touch taxation may be necessary to encourage investment in the sector and to protect small and…

Read more
Taxation and Customs Reforms in Fragile States: Between Bargaining and Enforcement
by Thomas Cantens & Gael Raballand

This paper explores why taxation reforms are so different in fragile states, the conditions in which they occur, and what can be done to make these reforms more successful – including contributing, whenever possible, to state-building. Based on extensive engagement and fieldwork in the Sahel and other regions in sub-Saharan Africa (including Central and West…

Read more
How Clean Are Our Taxpayer Returns? Data Management in Uganda Revenue Authority
by Jova Mayega, Ronald Waiswa, Jane Nabuyondo & Milly Nalukwago Isingoma

The paper assesses the cleanliness of taxpayer returns at the Uganda Revenue Authority (URA) in terms of: (a) completeness – the extent to which taxpayers submit all the required information as specified in the return forms; (b) accuracy – the extent to which the submitted information is correct; (c) consistency – the extent to which…

Read more

Blogs:

August 2021
by Bassirou Sarr, Justine Knebelmann & Victor Pouliquen

In June 2021, eight Senegalese tax agents based in the fiscal centre of Pikine, the country’s second largest city, generated over 500 detailed property tax information sheets in just four weeks. The information sheets contained GIS coordinates, cadastral identifiers, property characteristics, rental value, owner identification details and even pictures. These information sheets starkly contrast with…

Read more
June 2021
by Giovanni Occhiali, Max Gallien & Soukayna Remmal

In recent years, the legalisation of cannabis – initially for medical use, and increasingly for recreational use – has become a common policy talking point. But can legalised cannabis production become a new revenue source for low and middle-income countries? Canada and a range of states in the US have made headlines from legalisation initiatives…

Read more
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…

Read more

Research Projects:

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
Read more
Past Project
Is Value Added Withholding Tax effective as a tool of enhancing VAT and total revenue generation?
Project Researchers: Simbarashe Hamudi

VAT is a key revenue generating tax in Zimbabwe and all African states. It is also a key source of financing of the African countries budget. VAT revenues have an essential role in budgetary policymaking, and vast sums of VAT are not being collected each year due to issues such as ineffective administration and tax…

Read more
Past Project
How reliable are Taxpayers’ Tax Returns Data? Data Management in Uganda Revenue Authority
Project Researchers: Jova Mayega, URA, Jane Nabuyondo, URA, Milly Nalukwago, URA & Ronald Waiswa, URA

The overall objective of this project is to examine how clean the tax return data is in the Uganda Revenue Authority (URA). The team will examine the following research questions: What data gaps exist in URA tax return records? What are the sources of errors (if any) in the return filing process? What challenges do…

Read more
Past Project
ICTD-RRA National Taxpayer Survey
Project Researchers: Giulia Mascagni & Fabrizio Santoro

In 2019 the Rwanda Revenue Authority (RRA) commissioned a National Taxpayer Survey and related study on tax compliance to the International Centre for Tax and Development (ICTD). This study is meant to serve as background to the new RRA Tax Compliance Strategy, which is scheduled to be launched in July 2020. Data was collected in…

Read more
Past Project
The link between tax revenue allocation and tax morale in Nigeria
Project Researchers: Tom Moerenhout, IISD, Belinda Archibong & Evans Osabuohien

The proposed research will answer three research questions: (1) Do regions that have historically received more tax revenue have better tax morale? (2) What type of tax allocation in the form of public service provision increases tax morale? (3) Can oil producing regions turn the use of revenue from the 13% fund into higher tax…

Read more
Past Project
The Role of Information About Peer Behaviour on Tax Compliance in Nigeria: An Experimental Study
Project Researchers: Adedeji Adeniran, Joseph Ishaku, Precious Akanonu & Chukwuka Onyekwena

Domestic revenue mobilization is a priority for many SSA countries. Yet, low tax compliance constitutes a major challenge to this drive. Improving tax compliance will require an understanding of the underlying factors influencing a taxpayer’s decision to either pay taxes or not. However, little is known about tax compliance behaviour in most SSA countries; insights…

Read more
Past Project
Does Gender Matter in Tax Compliance? The Case of URA’s Individual Taxpayers
Project Researchers: Ronald Waiswa, Uganda Revenue Authority, Nathan Sebaggala & Jalia Kangave, ICTD

There is now an extensive body of literature looking into the factors that influence tax compliance. These studies, loosely known as tax morale studies, employ various tools to understand why some people pay taxes while others do not. In some cases, the studies are gender disaggregated, thereby enabling us to understand how men and women…

Read more
Current Project
Improving State Taxation Capacity using Administrative Data
Project Researchers: Aprajit Mahajan, JPAL-South Asia, Shekhar Mittal & Ofir Reich

Improving the state’s ability to tax effectively is central to the development process. However, tax collections (as a percentage of GDP) are low in most developing countries — in India the ratio is about 15% — and non-compliance is widely seen as an important problem. A common strategy to evade taxes is to establish shell…

Read more
Past Project
The Myth of Gender Tax Compliance in Ethiopian Enterprises
Project Researchers: Seid Yimam Mohamed & Fissha Asmare Marye

This study will examine tax compliance differential between female-owned and male-owned business enterprises in Ethiopia, particularly located in Addis Ababa. Collecting survey data on 400 medium and large size firms, we will estimate the log-odds-ratios from a fixed effect logit model to describe the probability of being tax compliant and apply a generalized Oaxaca–Blinder decomposition…

Project Outputs

Working Paper
Read more
Past Project
Rethinking Tax Morale
Project Researchers: Wilson Prichard, University of Toronto

The past decade has witnessed a surge in international interest in the importance of ‘tax morale’ as a key component of strategies for strengthening tax compliance in developing countries. This focus has been long overdue, and there is now broad research evidence that strengthening tax morale can have important benefits in encouraging ‘quasi-voluntary’ tax compliance….

Read more