## Citizens' Perceptions of Tax Authorities and Tax Efficiency in Africa

_IMF Working Papers, November 8, 2024_

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## Bibliographic details
- Authors: Telma Yamou, Alun H. Thomas, Kailhao Cai
- Published: November 8, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400292866.001

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### Key findings on perceptions and tax efficiency
- Study sample: 32 countries over 2014-2019.
- There is a negative and significant association between negative perceptions of trust in the tax department (Afrobarometer survey) and tax efficiency for VAT and CIT.
- A 1 percent increase in the share of citizens’ perception of little or no trust in the tax department leads to a 0.22 percent decrease in VAT tax efficiency, controlling for macroeconomic indicators.
- For corporate income tax productivity (focusing on tax payments of corporates), a significant adverse effect of negative perceptions is found only in fragile states.
- Perceptions about corruption in tax authorities have a similar effect on VAT and CIT tax efficiency; perceptions about trust and corruption capture the tendency to misappropriate revenues, but the two effects cannot be distinguished except for fragile states.
- The magnitude of the negative effect of distrust is significantly greater in fragile compared to non-fragile states.

### Analytical emphasis and interpretation
- The paper links citizen-level survey measures (trust in the tax department; perceptions of corruption) to observed government performance in collecting VAT and CIT revenues.
- Results are robust to controls for macroeconomic indicators.
- The analysis highlights heterogeneity by state fragility, with policy-relevant differences between fragile and non-fragile contexts.

### Policy implications and recommendations
- In fragile states, policies aimed at improving fiscal capacity should place a high importance on ensuring that citizens believe resources will be used properly.
- Improving citizens’ trust in tax authorities and reducing perceptions of corruption should be prioritized as part of strategies to enhance VAT and CIT tax efficiency.
- Fiscal reforms and revenue administration strengthening should incorporate measures to address public perceptions and trust, an aspect of tax policy not typically prioritized.

### Subjects and keywords (as given)
- Subject: Corporate income tax, Corruption, Crime, Revenue administration, Revenue performance assessment, Tax efficiency, Taxes, Value-added tax
- Keywords: Africa, CIT efficiency, Corporate income tax, Corruption, fragility, payments of corporate, tax authorities, tax department, tax efficiency, tax payment, Trust in authorities, Value-added tax

*IMF Working Paper No. 2024/234 — Telma Yamou, Alun H. Thomas, Kailhao Cai; November 8, 2024.*

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_Source: https://www.imf.org/en/publications/wp/issues/2024/11/08/citizens-perceptions-of-tax-authorities-and-tax-efficiency-557178_