Taxing the informal sector: Coping with coercion in Bamako, Mali
Motivation: In recent years, research has shown that informal workers and businesses in low-income countries are increasingly taxed by the state. While rarely a significant revenue source, informal sector taxation in highly informalized economies affects a large proportion of the working population. Under such circumstances the question of whether taxing informal economic activity either improves […]
Policy implementation under stress: Central-local government relations in property tax administration in Tanzania
Inter-organisational cooperation in revenue collection has received limited attention in the tax administration literature. Recent experiences from Tanzania offer a unique opportunity to examine opportunities and challenges facing such cooperation between central and local government agencies in a developing country context. The administration of property taxes (PT) in Tanzania has been oscillating between decentralised and […]
Colonial Legacy, State-building and the Salience of Ethnicity in Sub-Saharan Africa
African colonial history suggests that British colonial rule may have undermined state centralisation due to legacies of ethnic segregation and stronger executive constraints. Using micro-data from anglophone and francophone countries in sub-Saharan Africa, we find that anglophone citizens are less likely to identify themselves in national terms (relative to ethnic terms). To address endogeneity concerns, […]
The customer is king: Evidence on VAT compliance in Tanzania
Value Added Tax (VAT) has emerged as one of the main modes of raising tax revenue worldwide, but has significantly underperformed as a revenue source in African countries. To improve compliance, Tanzania has introduced Electronic Fiscal Devices (EFDs), which automatically transmit information about business transactions to the tax administration. However, VAT collection has not improved […]
Does an economic education produce technocratic paternalists? Experimental evidence from Tanzania
When confronted with information that ordinary citizens do not care that strongly about efficiency, do economists change their views of optimal public policy? In a randomized experiment on tax preferences conducted among business and economics students in Tanzania, we supplied the treatment group with information that ordinary citizens disagree with the implications of efficiency-based optimal […]
European colonization and the corruption of local elites: the case of chiefs in Africa
The association between British colonial rule and lower levels of corruption is often emphasized in legal origins literature (La Porta et al., 2008). However, given the historical context of Africa, we hypothesize that Britain’s system of colonial control suggests a legacy of higher corruption among local elites (chiefs). First, much of the colonial control of the local population […]
The non-oil tax reform in Angola: Escaping from petroleum dependency?
Angola experienced an extraordinary oil boom between 2004 and 2014. During this period, oil revenue accounted for 80% of all government revenue. In 2011, the Government of Angola started implementing a non-oil tax reform. The main objective of this reform was to reduce the Government’s dependency on oil revenues by broadening the tax base and […]
Understanding the resource curse: A large-scale experiment on corruption in Tanzania
Corruption is considered an important driver of the resource curse in developing countries. Based on a large-scale field experiment in Tanzania, this paper studies how the salience of future natural resource revenues shapes beliefs, attitudes, and behavior. We find some evidence that information about the discovery of natural gas causes people to expect more corruption […]
Citizens’ preferences for taxation of internationally mobile corporations: Evidence from Tanzania
The legitimacy of the tax system is likely to be compromised in the absence of public support. This article presents evidence from a discrete choice experiment designed to elicit the tax preferences of ordinary citizens on how corporations should be taxed. We find that respondents prefer higher taxes on more internationally mobile companies, which is […]
