Enhancing Transparency in Tax Administration: A Survey

Uneven tax administration in Africa is a major contributor to revenue shortfalls that augment inflationary pressure while depriving governments of resources with which to provide public goods. It also stimulates resort for more easily collected taxes on foreign trade, with associated efficiency losses. Reducing evasion should ease the burden on economic agents who currently pay relatively high proportions of their tax liabilities, thus increasing allocative efficiency, enhancing incentives for those agents to invest and produce, and promoting growth with equity. The present paper outlines a framework for research on the issue of whether enhanced transparency in tax administration might increase compliance significantly (or at least enough to yield a positive return on research cost). The subject goes well beyond the domain of economics, raising the question of whether heightened understanding on the part of economic agents about the extent…