Topic Guide: Tax Administration

Approaches to curbing corruption in tax administration in Africa. Martini, M., 2014. http://www.transparency.org/wh...

Corruption in tax administration in Africa remains a fundamental barrier to effective and fair taxation and to building trust between government and citizens. There are very few recent studies assessing the extent to which and how corruption affects tax administration in Africa, but surveys on citizen experience and perceptions of corruption within tax administrations paint a worrying picture. Studies and anecdotal examples also demonstrate that corruption in tax administration takes different forms, from bribery to patronage, to revolving doors and regulatory capture. Approaches to fighting corruption in tax administration include measures to enhance the autonomy and capacity of tax agencies, for example, through the establishment of semi-autonomous tax agencies, higher salaries, measures to improve tax services and reduce taxpayers’ interactions with tax officials by, for instance, investing in technology and taxpayer education, as well as measures to improve internal control and oversight and encourage informants to report corruption.  

Corruption in tax administration. Bridi, A., 2010.http://www.u4.no/publications/corruption-in-tax-administration/downloadasset/422  

A state’s revenue processes involves several major stakeholders and make the opportunities for and motivations to engage in corruption both numerous and widespread. These stakeholders include the tax officials, politicians, patrimonial networks and the taxpayers themselves. Drawing from experience from Mexico and Bolivia, Bulgaria and Tanzania, this Helpdesk answer presents various approaches to combat fiscal corruption, including value added tax refunds, semi-autonomous revenue authorities, increasing transparency and citizen participation and employment practices, and strengthening management, performance objectives and taxpayer participation, among others.  

Exploring the relationships between corruption and tax revenue. Nawaz, F., 2010. http://www.u4.no/publications/...

Corruption has a significant negative impact on the levels of tax revenue collected in a country. The current understanding of the correlation between corruption and tax revenue, however, is incomplete since there is insufficient information available on the impact of taxation on corruption. Corruption not only lowers the tax to GDP ratio, but also causes long-term damage to the economy by detracting investment, increasing the size of the shadow economy, distorting tax structures and corroding the tax morality of taxpayers. All of these in turn further reduce the long-term revenue generating potential of the economy. The impact of taxation on corruption is less explored in the existing research literature. A limited body of research data indicates that higher tax rates can induce more corruption in an economy by incentivising tax evasion.