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Estimating the value-added tax gap in Tanzania: A study of small, medium, and micro enterprises

Author

Listed:
  • Amina Ebrahim
  • Sebastián Castillo
  • Vincent Leyaro
  • Ezekiel Swema
  • Oswald Haule
  • Massaga Fimbo
  • Ephraim Mdee

Abstract

This study measures the VAT compliance gap for small and medium-sized entities in Tanzania. Specifically, the study measures the under-reporting component of the VAT compliance gap. This study uses VAT declaration and audit data to conduct a bottom-up estimation to measure the extent of VAT misreporting in small, medium, and micro enterprises. The study's objective is to examine the extent of VAT under-reporting from 2014 to 2020 and identify the behaviour of firms that contribute to the VAT gap.

Suggested Citation

  • Amina Ebrahim & Sebastián Castillo & Vincent Leyaro & Ezekiel Swema & Oswald Haule & Massaga Fimbo & Ephraim Mdee, 2024. "Estimating the value-added tax gap in Tanzania: A study of small, medium, and micro enterprises," WIDER Working Paper Series wp-2024-66, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2024-66
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    File URL: https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2024-66-estimating-value-added-tax-gap-Tanzania.pdf
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    References listed on IDEAS

    as
    1. Kwabena Adu-Ababio & Aliisa Koivisto & Eliya Lungu & Evaristo Mwale & Jonathan Msoni & Kangwa Musole, 2023. "Estimating tax gaps in Zambia: A bottom-up approach based on audit assessments," WIDER Working Paper Series wp-2023-25, World Institute for Development Economic Research (UNU-WIDER).
    2. Sendhil Mullainathan & Jann Spiess, 2017. "Machine Learning: An Applied Econometric Approach," Journal of Economic Perspectives, American Economic Association, vol. 31(2), pages 87-106, Spring.
    3. José M. Durán-Cabré & Alejandro Esteller Moré & Mariona Mas-Montserrat & Luca Salvadori, 2019. "The tax gap as a public management instrument: application to wealth taxes," Applied Economic Analysis, Emerald Group Publishing Limited, vol. 27(81), pages 207-225, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Value-added tax; Tax compliance; Tax gap; Audits; Bottom-up approach; Income under-reporting;
    All these keywords.

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