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The effects of a risk-based approach to tax examinations: Evidence from Tanzania

Author

Listed:
  • Amina Ebrahim
  • Elineema Kisanga
  • Ezekiel Swema
  • Vincent Leyaro
  • Edwin P. Mhede
  • Ephraim Mdee
  • Heikki Palviainen
  • Jukka Pirttilä

Abstract

While technical assistance and increased use of ICT in the area of tax administration have been regarded to hold considerable promise for greater revenue collection, the evidence on how these activities work in the real-world circumstances of developing countries is scant. The paper attempts to fill this gap by evaluating an intervention undertaken jointly by the Finnish and Tanzanian revenue administrations. In this pilot programme, a risk-based method for enhancing firm tax examinations in Tanzania was developed.

Suggested Citation

  • Amina Ebrahim & Elineema Kisanga & Ezekiel Swema & Vincent Leyaro & Edwin P. Mhede & Ephraim Mdee & Heikki Palviainen & Jukka Pirttilä, 2021. "The effects of a risk-based approach to tax examinations: Evidence from Tanzania," WIDER Working Paper Series wp-2021-150, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2021-150
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    References listed on IDEAS

    as
    1. Joel Slemrod, 2019. "Tax Compliance and Enforcement," Journal of Economic Literature, American Economic Association, vol. 57(4), pages 904-954, December.
    2. Dina Pomeranz, 2015. "No Taxation without Information: Deterrence and Self-Enforcement in the Value Added Tax," American Economic Review, American Economic Association, vol. 105(8), pages 2539-2569, August.
    3. Paul Carrillo & Dina Pomeranz & Monica Singhal, 2017. "Dodging the Taxman: Firm Misreporting and Limits to Tax Enforcement," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 144-164, April.
    4. Nicky J. Welton & Howard H. Z. Thom, 2015. "Value of Information," Medical Decision Making, , vol. 35(5), pages 564-566, July.
    5. Epaphra, Manamba, 2015. "Tax Rates and Tax Evasion: Evidence from Missing Imports in Tanzania," MPRA Paper 62328, University Library of Munich, Germany.
    6. Henrik Jacobsen Kleven & Martin B. Knudsen & Claus Thustrup Kreiner & Søren Pedersen & Emmanuel Saez, 2011. "Unwilling or Unable to Cheat? Evidence From a Tax Audit Experiment in Denmark," Econometrica, Econometric Society, vol. 79(3), pages 651-692, May.
    7. Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
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    Cited by:

    1. Kotsogiannis, Christos & Salvadori, Luca & Karangwa, John & Mukamana, Theonille, 2024. "Do tax audits have a dynamic impact? Evidence from corporate income tax administrative data," Journal of Development Economics, Elsevier, vol. 170(C).

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    More about this item

    Keywords

    Risk-based approach; Tax compliance; Tanzania; Tax administration; Domestic revenue mobilization; Administrative data; Taxable income;
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