Date post: | 27-Nov-2014 |
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Economy & Finance |
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Informal taxation and service delivery in post-
conflict Sierra Leone Samuel Jibao
Director, Centre for Economic Research and Capacity Building
Wilson Prichard Research Director, International Centre for Tax and Development and Assistant Professor,
University of Toronto
Vanessa van den Boogaard Research Officer, International Centre for Tax and Development and PhD Candidate,
University of Toronto
2 September 2014, Colombo CEPA and SLRC 13th Annual Symposium on Post-war Development in Asia and Africa
Outline
Methods Findings Implications
Research methods
Methods Findings Implications
Research methods
• 1129 taxpayer survey • +/-10% confidence
interval • 95% confidence level
• In-depth interviews
• Focus group discussions
Research methods
Background
Key Findings
Methods Findings Implications
1. Prevalence of informal taxation
0% 20% 40% 60% 80% 100%
Private development taxes Taxes to CBOs
Informal user fees to schools Payments to secret societies
Payments to trade associations Payments to religious groups
Informal payments to chief Labour services to chief
Informal taxes to army/police Sales tax
Business licenses Market dues
Local tax User fees schools/clinics
Proportion of households paying each tax in the previous year
1. Prevalence of informal taxation
0% 20% 40% 60% 80% 100%
Mean number of taxes paid annually
Mean annual tax expenditure (USD)
Formal state taxes Informal state taxes Chiefdom taxes Non-state taxes
2a. Taxpayer perceptions: Fairness
0%
20%
40%
60%
80%
100%
Formal state taxes
Informal state taxes
Chiefdom taxes
Non-state taxes
Mean proportion of respondents believing that…
…the tax rate is reasonable/would be willing to pay a higher rate
…the tax is fairly applied and collected
…everyone pays their fair share of the tax that should do so
2b. Taxpayer perceptions: Transparency
0%
20%
40%
60%
80%
100%
Formal state taxes
Informal state taxes
Chiefdom taxes
Non-state taxes
Mean proportion of respondents reporting that…
…they understand how the tax rate is set
…it is easy to find out how revenues from this tax are used
2c. Taxpayer perceptions: Fiscal exchange
0%
20%
40%
60%
80%
100%
Formal state taxes
Informal state taxes
Chiefdom taxes
Non-state taxes
What is the primary good/service you get in return for making this payment?
Don't know
Security
Financing of legitimate salaries and general activites of government/actor/organization, but not specific services A specific service/good in the community
Avoidance of harassment/stress/hassle
No service
2d. Taxpayer perceptions: Accountability
0%
20%
40%
60%
80%
100%
Formal state taxes
Informal state taxes
Chiefdom taxes
Non-state taxes
Do you think that the actor collecting this tax uses it to benefit the community most, some or none of the time?
Don't know
Most of the time
Some of the time
None of the time
Implications
Methods Findings Implications
Implications and areas for further research
• Thinking about informality
• Tax and service delivery methods
• Role of chiefs in tax and service delivery
• Taxpayer confidence in formal tax system
Thank you! Discussion and questions
Methods Findings Implications