Essays on tax administration and tax compliance in sub-Saharan Africa

This thesis studies the determinants of tax compliance and the challenges of tax administration in a context of weak fiscal capacity and poor taxpayer attitudes, subSaharan Africa. The main research question regards the understanding of why African taxpayers evade taxes and which are the most effective strategies revenue authorities could pursue to foster voluntary compliance. The thesis contributes to the debate on tax revenue mobilisation in Africa by focusing on Rwanda and Eswatini. It stems from close research collaboration with national revenue authorities and relies on rich administrative data, uniquely combined with survey data. Also, it focuses on compliance of companies and self-employed with income tax, a crucial revenue source in both countries for which opportunities of tax evasion are more common. This thesis comprises three chapters. The first chapter evaluates the effectiveness of a tax training program on tax knowledge, perceptions and compliance. It combines pre and post-training survey data with tax returns records. I find that taxpayer education significantly improves knowledge and perceptions of complexity. I also show that the program brings taxpayers into the habit of filing returns, in a context where non-filing is widespread. The second chapter looks at the determinants of non-filing of tax returns in Eswatini. The motivation of this analysis comes from the large extent of this under-studied behavior in SSA. I combine survey data from 1,000 entrepreneurs with their 2013- 2018 income tax returns. I show that economic deterrence, compliance costs and moral factors are strongly correlated with actual filing. I also argue that tax knowledge plays a major role in explaining the decision to file. Lastly, the third chapter implements a randomized controlled trial nudging more than 20,000 income taxpayers in Eswatini and targeting non-filers, nil-filers and active taxpayers. I find that non-filers significantly respond to nudges, while nil and active filers do not. The best performing nudges build on the deterrence and facilitation paradigms. Also, negative responses from large companies are found.