Measuring an Absence of Fiscal Citizenship : Reflections on the Tax Gap

The tax gap is an increasingly common mechanism for assessing the mismatch between tax that theoretically should be collected, and tax that is actually collected. There are many countries that attempt to estimate what can be conceived of as a ‘revenue loss” and is in effect an absence of fiscal citizenship. The work of quantifying the tax gap has assumed almost a mythical status, presumed to be an accurate reflection of a real phenomenon. Simple in theory, full of caveats in practice this is a number that causes quite a stir when published: “Imagine the good policies that could be implemented if all due tax was collected”! Politicians and public administrators steer compliance policies by reference the tax gap, tax administrations see a shrinking tax gap as a sign of success. Media and stakeholders make all sorts of comparison based on this fickle number