Tax and Governance

There is mounting evidence that increased taxation can spur statebuilding and increase government accountability. This possibility is critical: without strong links between taxation, statebuilding and accountability, expanded taxation may fail to deliver improved outcomes for taxpayers. However, such links are far from guaranteed, and depend, among other things, on the types of taxes raised, the nature and equity of tax enforcement, the extent of transparency, the existence of forums for popular engagement and the role of civil society in supporting popular demand making. The current phase of our research on this theme focuses on identifying concrete strategies for strengthening the links between taxation and good governance at both the local and national levels.

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Publications:

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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Developing influence: the power of ‘the rest’ in global tax governance
by Martin Hearson, Rasmus Corlin Christensen & Tovony Randriamanalina

As Western-led institutions of global governance adapt to global power shifts, the question of which countries dominate, and how, increasingly animates scholarship. Yet while attention has shifted from ‘Great’ to ‘Rising’ Powers, the underlying focus on market power has changed little. In this article, we shift the focus to alternative forms of power that developing…

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Mandating Digital Tax Tools as a Response to Covid: Evidence from Eswatini
by Fabrizio Santoro, Razan Amine & Tanele Magongo

Many tax authorities changed the mode of interacting with taxpayers from physical to online as a response to the Covid-19 pandemic, to diminish the spread of the virus. Eswatini, the country under study, mandated the use of online tax filing through the e-Tax system for all income tax payers, coupled with a zero-cash-handling policy for…

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March 2022
Co-financing community-driven development through informal taxation: Evidence from south-central Somalia
by Vanessa van den Boogaard & Fabrizio Santoro

Community contributions are often required as part of community-driven development programs, with contributions encouraged through matching grants. However, little remains known about the impact of matching grants or the implications of requiring community contributions—also known as informal taxation. We explore this research gap through a randomized control trial of a matching grant program in Gedo…

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March 2022
Tax and Governance in the Context of Scarce Revenues: Inefficient Tax Collection and its Implications in Rural West Africa
by Vanessa van den Boogaard & Rachel Beach

In recent years, domestic and international policy attention has often focused on broadening the tax base in order to include a greater share of the population in the ‘tax net’. This is based, in part, on the hope that the expansion of taxation will result in positive ‘governance dividends’ for taxpayers. However, the implications of…

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February 2022
Taliban Taxation in Afghanistan: (2006-2021)
by Rahmatullah Amiri & Ashley Jackson

Before taking control of Afghanistan in August 2021, the Taliban had developed a remarkably state-like revenue collection system throughout the country. This ICTD research explores how that came to be, and what factors shaped the various forms of Taliban taxation. Drawing primarily on fieldwork from Helmand, Ghazni and Kunduz provinces, this paper explores in depth…

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February 2022
Innovations in Tax Compliance: Building Trust, Navigating Politics, and Tailoring Reform
by Roel Dom, Anna Custers, Stephen Davenport & Wilson Prichard

Recent decades have seen important progress in strengthening country tax systems. Yet many areas of reform have remained stubbornly resistant to major improvements. Overall, revenue collection still falls short of that needed for effective governance and service delivery. Tax collection is too often riddled with high rates of evasion among large corporations and the rich…

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January 2022
Enabling Tax Bargaining: Supporting More Meaningful Tax Transparency and Taxpayer Engagement in Ghana and Sierra Leone
by Vanessa van den Boogaard, Wilson Prichard, Rachel Beach & Fariya Mohiuddin

While there is increasing evidence that taxation can contribute to greater government responsiveness and accountability, such positive outcomes are not guaranteed. If the environment does not enable tax bargaining, there is a risk that taxation will amount to little more than enforced extraction. We consider how such enabling environments may be fostered and identify specific…

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December 2021
The Routledge Handbook of Smuggling
by Max Gallien & Florian Weigand

The Routledge Handbook of Smuggling offers a comprehensive survey of interdisciplinary research related to smuggling, reflecting on key themes, and charting current and future trends. Divided into six parts and spanning over 30 chapters, the volume covers themes such as mobility, borders, violent conflict, and state politics, as well as looks at the smuggling of…

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December 2021
Informal Workers and the State: The Politics of Connection and Disconnection During a Global Pandemic
by Max Gallien & Vanessa van den Boogaard

In low- and middle-income countries, informal workers are particularly vulnerable to the health and economic effects of the Covid-19 pandemic and often neglected by policy responses. At the same time, the crisis is rapidly changing the ways that states engage with informal workers. We argue that the relationships between informal workers and states – and…

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Blogs:

June 2022
by Giulia Mascagni

As leaders meet at the Commonwealth Heads of Government Meeting (CHOGM), this week in Kigali, Rwanda, they have an opportunity to focus their attention on the big development challenges of our time. Taxation might not be the first thing that comes to mind as business, civil society and governments discuss this year’s theme “Delivering a…

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June 2022
by Martin Hearson & Mary Abounabhan

Ghana’s Minister of Finance recently declined to provide assurance that revenue from a new tax on digital financial services would not be collateralised. At a recent press conference, the Minister stated that he would examine the situation at hand and take a decision with cabinet on how to use resources.  Ghana’s Electronic Transfer Levy (E-Levy),…

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April 2022
by Christopher Wales & Hannelore Niesten

Ghana’s Electronic Transfer Levy will come into effect on 1 May 2022 according to the Ghana Revenue Authority. But can it be implemented legally on the proposed date and, beyond that, how is it going to work? In the last few days, the GRA issued some Guidelines aimed at clarifying the scope and the implementation…

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Research Projects:

Current Project
Evidence Gap Map on Digital Financial Services: Enablers, Barriers, and Impacts
Project Researchers: Philip Madar, ICTD, Maren Duvendack, Adrienne Lees, ICTD, Aurelie Larquemin & Keir Macdonald, IDS

Many governments are considering taxing digital financial services (DFS), but to tax them properly we need to understand what enables or prevents people using DFS, and what impact DFS usage has. Our Evidence Gap Map (EGM) brings together all the evidence-based research available on these enablers, barriers and impacts. An EGM serves to pinpoint where…

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Past Project
The Promise and Limitations of Information Technology for Tax Administration
Project Researchers: Oyebola Okunogbe & Fabrizio Santoro, ICTD

This research has been conducted in partnership with the World Bank. The paper examines the potential of technology in transforming tax administration by helping to identify the tax base, facilitate compliance, and monitor compliance. It also identifies possible limitations to the use of technology arising from inadequate connectivity infrastructure, lack of adoption (or resistance) by…

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Current Project
Understanding Retail CBDC’s and their Potential Role for Revenue Authorities
Project Researchers: Laura Munoz Perez, ICTD & Moyosore Arewa, ICTD

This research assignment focuses on exploring the potential role of Central Bank Digital Currencies (CBDC) on taxation regimes and RAs in developing countries. This research will outline the concept of CBDC and its various potential designs, an overview of current testing or CBDC implementation plans across the developed and developing world, possible taxation use cases…

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Current Project
Inter-Institutional Data Sharing and Cooperation for Better Tax Administration – Evidence from Uganda
Project Researchers: Fabrizio Santoro, ICTD, Moyosore Arewa, ICTD, Ronald Waiswa & Jane Nabuyondo

Building on background work from Arewa (forthcoming) and connecting with recent evidence on gaps in URA administrative data (Mayega et al 2019, 2021) this study attempts to address the three following interrelated questions: How is the integration with other public institutions’ databases taking place in Uganda? Which are the challenges both URA and other institutions…

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Current Project
Leveraging DFS and Digital IDs for Improved Tax Collection in the Togo Revenue Authority (OTR)
Project Researchers: Dorothy Kang’oro, Ignatius Odongo & Fidèle Kanyarugero Ngerero

This research will primarily seek to answer how the Togo Revenue Authority (OTR) can harness the potential of DFS to improve tax administration in the country?

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Current Project
Examining Digital Payments in Rwanda as a Medium for Tax Compliance
Project Researchers: Ludovic Bernad, Yves Nsengiyumva, Benjamin Byinshi & Fabrizio Santoro, ICTD

This study explores how digital payment data can be used to solve tax compliance challenges in Rwanda by identifying the potential that digital transactions can have on tax compliance, perceptions, and the tax administration’s efficacy.

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Current Project
Tax Revenue in Emerging Markets and Developing Countries: Do Mobile Financial Services Matter?
Project Researchers: Alphonse Noah, Martine Tania Azoa Balengla, Joseph Keneck Massil & Bernard Clery Nomo Beyala

This research project plans to investigate whether and how the rapid expansion of mobile financial services (mobile money, mobile credit, mobile savings) influences domestic resource mobilisation in emerging markets and developing countries (EMDCs).

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Current Project
Extent of Adoption and Effective Data Utilisation from Digitalised Tax Payment Systems and Digital IDs among States’ Taxing Authorities in Nigeria
Project Researchers: Abdulsalam Mas’ud, Sani Mohammed Damamisau & Yusuf Abdu Gimba

This research project will assess the extent of the adoption of these technologies among states’ taxing authorities and how the data from these technologies is being used in strengthening tax administration effectively.

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Current Project
The Making of Zimbabwe Mobile Money Tax
Project Researchers: Simbarashe Hamudi

An analysis of the policymaking process followed in Zimbabwe for the introduction of the money transfer tax.

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Current Project
Impact of Compulsory e-Payments on Compliance in Eswatini
Project Researchers: Fabrizio Santoro, ICTD, Razan Amine, ICTD & Tanele Magongo

This paper spurs from the interest of the Eswatini Revenue Authority (partners in the study) and evaluates the impact of the mandate of electronic filing for income taxes, as implemented in Eswatini in September 2020 in response to the COVID emergency. By relying on a rich set of taxpayer-level administrative data from the revenue authority,…

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