When tax officials visit: why softer tax outreach can build trust in some places and erode it in others
Originally published by The Conversation – Articles (AFRICA) — Read the original article →
Across sub-Saharan Africa, revenue authorities are increasingly changing how they engage with small businesses. The traditional approach involved audits, penalties and inspections. But more recently many are investing in taxpayer education, “door-to-door” visits, and focusing on ways to make it easier to comply.
The logic driving the change is that auditing every small trader is expensive and unpopular, while building trust appears cheaper and more durable.
Our new International Centre for Taxation and Development study in Tanzania suggests the story is more complicated. We worked closely with the revenue authority to carry out a large trial where we increased the presence of tax officials in some randomly selected wards and measured the impact on trust and compliance. This study drew on our experience running trials with revenue authorities in several other lower income countries.
