Innovations in Tax Compliance: Conceptual Framework

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

What we hoped for and what we achieved: Tax performance of Semi‐Autonomous Revenue Authorities in sub‐Saharan Africa

“…Second, it has also been argued that direct taxes are more progressive and can have an impact on equity. While an actual redistributive effect largely depends on how taxes are collected and spent (Prichard et al, 2019;Timmons, 2005), direct taxes, such as income tax, have an important symbolic value by showing concern for distributive outcomes (Bird & Zolt, 2005).…”

“…As such, any distortion of this type is likely to be negligible, whereas the distortions implied by relying solely on central government data are comparatively very large' (Prichard et al, 2014, p. 28) 3 Although depending on how revenue is spent, direct taxes may not be more redistributive than indirect taxes (see e.g. Prichard et al, 2019;Timmons, 2005). Some also argue that in developing countries, imposing, for example, income tax is more of a symbol to show concern rather than an effective tool for redistribution (Bird & Zolt, 2005).…”

“…These semiautonomous organizations can help mitigate some of the challenges of collecting direct tax revenue, which currently constitutes a relatively small proportion of total tax revenue in most developing countries, largely because it is inherently difficult to collect direct tax revenue in developing economies dominated by informal sectors and agrarian societies (e.g., Bird & Zolt, 2005;Gupta, 2007;Moore, 2008). Second, it has traditionally been argued that direct taxes can be structured more progressively than is possible with indirect taxes and thereby have redistributive potential 3 (e.g., Bird & Zolt, 2005;Gupta, 2007;Prichard et al, 2019). Third, direct taxation is theorised to be essential for the establishment of a fiscal contract, and SARAs can thus support this development (e.g., Tilly, 1990).…”

Taxing Informality: Compliance and Policy Preferences in Urban Zambia

“…In Africa, van den Boogaard et al (2019) find that trust is equally key for compliance with non-statutory taxes, including those levied by marketplace associations and chiefs (see also Prichard, 2019). Trust is often affected by reciprocity; if goods and services are not exchanged for tax payments, payers become less trusting in tax-collecting authorities over time (Fjeldstad, 2004;Prichard, Custers, Dom, Davenport, & Roscitt, 2019).…”

Penegakan Hukum Perpajakan Yang Efektif Dalam Mendorong Realisasi Pencapaian Target Penerimaan Pajak Melalui Kepatuhan Perpajakan

“…Kegiatan penagihan pajak berperan penting dalam mendukung kepatuhan Wajib pajak dan kemudian memberikan kontribusi signifikan dalam pencapaian target penerimaan pajak (Annual Report DJP, 2009). Fokus pada tindakan penegakan hukum pajak dalam hal penagihan pajak telah menopang serangkaian reformasi perpajakan, dengan perolehan penerimaan pajak yang cukup konsisten (Prichard et al, 2019). Upaya untuk memperkuat penegakan hukum pajak mencakup investasi dalam membangun pengawasan yang dirancang untuk mengurangi ruang lingkup Wajib Pajak untuk menghindari, metode penagihan pajak yang ditingkatkan, dan perubahan kebijakan yang dirancang untuk mengurangi ruang lingkup kepatuhan (Prichard et al, 2019).…”