The Corporate Tax Burden in Ethiopia: Evidence from Anonymised Tax Returns

One Size Does Not Fit All: A Field Experiment on the Drivers of Tax Compliance and Delivery Methods in Rwanda

“…Although this behaviour seems puzzling, there are at least two possible explanations. The first one is that this is a way to avoid fines for non-filing while still managing to avoid paying any income tax (Mascagni et al 2016a;Mascagni and Mengistu 2016). The second one is that processes for de-registration are so complex that taxpayers prefer to remain registered and keep filing nil returns.…”

“…First, they have much less access to information on the tax system, due to the shortage of good tax advisors and to limited resources they can dedicate to tasks related to taxpaying. In lowincome countries, this often results in higher compliance costs and even larger tax burdens than large taxpayers (Coolidge 2012;Yesegat, Vorontsov, Coolidge and Corthay 2015;Mascagni and Mengistu 2016). Second, it is very unlikely for the RRA to get in touch with small taxpayers with formal audits or even informal checks (Mascagni et al 2016a).…”

Linking taxation and social protection: Evidence on redistribution and poverty reduction in Ethiopia

“…In these countries, taxation is seen as less effective due to large informal economies and a heavy reliance on indirect taxes that are often only mildly progressive or even regressive (Muñoz and Cho, ; Bird and Zolt, ; Emran and Stiglitz, ; Bastagli, ). Moreover, there is mounting evidence from the African continent showing that tax systems that are proportional or progressive on paper may still be regressive in practice (Mascagni and Mengistu, ; Mascagni, Monkam and Nell, ). The common policy prescription is therefore that taxation should mostly focus on generating revenue for social spending (Bird and Zolt, ).…”

Effective corporate tax burden and firm size in South Africa: A firm-level analysis

“…Governments have to strike the right balance between collecting enough revenue to finance the basic functions of the state, promoting equity and redistribution in society, and building an enabling environment for businesses to prosper. Against this background, several studies have focused on the broad issue of business taxation, ranging from evaluation of fiscal incentives (Kinda 2014;Klemm 2010;Klemm and Van Parys 2012) and microeconomic evaluations of the tax burden on firms (Gauthier and Reinikka 2006;Mascagni and Mengistu 2016). Our work relates particularly to the latter and focuses on the tax burden of corporate businesses in South Africa.…”

“…First, by modelling only one tax type, we can identify more clearly deviations of actual tax burdens from the tax code. For example, a recent paper has shown that tax systems that are designed to be proportional on paper (as CIT normally is) can actually be regressive in practice (Mascagni and Mengistu 2016). Second, this tax type is particularly important as a policy tool to promote industrial development, as many fiscal incentives across Africa exempt businesses from paying taxes on profits.…”