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Tax and Governance in Rural Areas: The Implications of Inefficient Tax Collection

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  • van den Boogaard, Vanessa
  • Beach, Rachel

Abstract

While there has been increasing policy attention on broadening tax bases in low-income countries, taxing citizens in rural areas often leads to neither revenue gains nor stronger accountability outcomes. Through case studies of Sierra Leone and Togo, we demonstrate that revenue collection in rural areas is highly inefficient, leading to little, if any, revenue gains after factoring in collection costs. Accordingly, we question the existing rationales for extending taxation to rural citizens in low-income countries. Instead, we argue for a rethinking of the role of taxation in rural areas, considering the nature of social contracts and limited fiscal reciprocity.

Suggested Citation

  • van den Boogaard, Vanessa & Beach, Rachel, 2023. "Tax and Governance in Rural Areas: The Implications of Inefficient Tax Collection," Working Papers 17934, Institute of Development Studies, International Centre for Tax and Development.
    • Handle: RePEc:idq:ictduk:17934
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    File URL: https://opendocs.ids.ac.uk/opendocs/handle/20.500.12413/17934
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    2. Vanessa van den Boogaard & Wilson Prichard & Rachel Beach & Fariya Mohiuddin, 2022. "Enabling tax bargaining: Supporting more meaningful tax transparency and taxpayer engagement in Ghana and Sierra Leone," Development Policy Review, Overseas Development Institute, vol. 40(1), January.
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    5. Shantayanan Devarajan & Stuti Khemani & Shekhar Shah, 2009. "The Politics of Partial Decentralization," Chapters, in: Ehtisham Ahmad & Giorgio Brosio (ed.), Does Decentralization Enhance Service Delivery and Poverty Reduction?, chapter 5, Edward Elgar Publishing.
    6. Kate Meagher, 2018. "Taxing Times: Taxation, Divided Societies and the Informal Economy in Northern Nigeria," Journal of Development Studies, Taylor & Francis Journals, vol. 54(1), pages 1-17, January.
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    Finance; Governance;

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