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on Informal and Underground Economics |
| By: | Telma Yamou; Mr. Alun H. Thomas; Kaihao Cai |
| Abstract: | This paper examines the relationship between citizens’ perceptions of tax authorities and the governments’ efficiency in collecting VAT and CIT revenues in Africa. Drawing on data from 32 countries over 2014-2019, we find a negative and significant association between negative perceptions of trust in authorities (the tax department) from the Afrobarometer survey and tax efficiency for these revenue categories. A 1 percent increase in the share of citizens’ perception of little or no trust in the tax department leads to a 0.22 percent decrease in VAT tax efficiency, controlling for macroeconomic indicators. The magnitude of the effect is significantly greater in fragile compared to non-fragile states. For corporate income tax productivity focusing on tax payments of corporates we find a significant effect only in fragile states. Perceptions about corruption in tax authorities have a similar effect on VAT and CIT tax efficiency since perceptions about trust and corruption capture the tendency to misappropriate revenues but we are unable to distinguish the two effects except for fragile states. Our findings suggest that in the face of fragility, policies aimed at improving fiscal capacity should place a high importance on ensuring that citizens believe resources will be used properly, an aspect of tax policy not typically prioritized. |
| Keywords: | Trust in authorities; fragility; tax efficiency; Africa |
| Date: | 2024–11–08 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/234 |
| By: | Hess, Ryan (U of Georgia); Black, Emily (New York U); Javed, Zaynah (Stanford U); Hennessy, Jonathan (Stanford U); Lester, Rebecca (Stanford U); Goldin, Jacob (U of Chicago); Ho, Daniel E. (Stanford U); Portz, Annette (US Internal Revenue Service) |
| Abstract: | U.S. partnerships control more than $40 trillion in assets, vastly outnumber U.S. public firms, and contribute significantly to the U.S. tax non-compliance of pass-through entities, which is larger than the non-compliance of publicly traded corporations. However, the prior literature provides extremely little evidence explaining the pervasive use of such entities and which specific characteristics enable the lightly taxed nature of partnership business income. Using administrative U.S. tax data, we first create graphical organizational structures by tracing income through millions of partnership entities. We show that 80 percent of partnership groups are simple structures composed of one single partnership owned directly by individual taxpayers. In contrast, the most complex structures resemble “webs, †characterized by multiple tiers of ownership and clusters of overlapping partners. Second, we determine the entity attributes associated with partnerships developing into complex organizations. Third, conditional on being selected for audit, complex partnerships are four percent less likely to be assessed additional tax, but the amount of assessments is larger. Fourth, we show that complex partnership audits have a high return-on-investment, generating $20 of assessments for each $1 spent, which is a rate over eight times that for corporations. Thus, beyond adding to the nascent literature explaining the prevalent use of partnerships, we provide new insights about the under-reporting of tax on U.S. business income and quantify the potentially large increases in tax revenue collection that could be obtained from increased enforcement of complex partnership businesses. |
| JEL: | D85 H24 H25 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ecl:stabus:4219 |
| By: | 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. |
| Keywords: | Value-added tax, Tax compliance, Tax gap, Audits, Bottom-up approach, Income under-reporting |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2024-66 |
| By: | Hisham Aidi |
| Abstract: | This piece examines the role of labor and religious movements in the face of the “informalization” of the African economy. How does the growth of an informal sector set back class formation and labor activism? How will the rise of economic networks outside formal economic and political channels affect state capacity? Can labor unions develop organizational independence if the labor market is segmented with a growing number of informal workers? What happens when labor market “insiders” confront a growing number of labor market “outsiders”? |
| Date: | 2022–11 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:pb_63_22 |
| By: | Rajaona, Ambinistoa; Limbe, Medad; Ali, Mustaf |
| Abstract: | This study investigates the impact of formal employment on household welfare in rural Tanzania using data from the 2012/13 Tanzania National Panel. Distance to major roads is employed as an instrumental variable to estimate the local area treatment effect (LATE) of formal employment participation on household consumption levels. Results from the first stage show that as distance from major roads increases the likelihood of participating in formal employment also declines. The second stage results reveal that households that are engaged in formal employment have significantly higher consumption levels compared to households to non-participating households. The findings highlight the crucial role that improving road infrastructure can play in promoting access to formal employment opportunities and improving living standards in rural areas. |
| Keywords: | employment; welfare; infrastructure; tanzania; instrumental variables; LATE |
| JEL: | D1 D6 I3 I38 |
| Date: | 2024–06–02 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122180 |
| By: | Ibrahima Mamikouny Sory Camara (LPAO-SF - Laboratoire de Physique de l'Atmosphère et de l'Océan Siméon Fongang - ESP - École Supérieure Polytechnique de Dakar - UCAD - Université Cheikh Anta Diop de Dakar [Sénégal]); Alpha Oumar Camara |
| Abstract: | Abstract This study, focusing on the professional downgrading of graduates in Guinea, examines the factors influencing this phenomenon through a quantitative approach. Conducted among graduates from 2016 to 2021 at the University of N'Zerekore, it relies on a stratified sampling technique to ensure representativeness of the different fields of study. Logistic regression analysis was used to assess the impact of several variables: gender, employment sector, salary, and residence. The results reveal that 65% of graduate employees feel that their skills exceed the requirements of their position. Graduates working in the informal sector or earning salaries below 550, 000 FG (around $60) were at higher risk of downgrading. In addition, graduates between 2016 and 2019, as well as those living in Upper Guinea, feel more downgraded. These observations are partly linked to the precariousness of jobs in the informal sector, where graduates find it hard to put their skills to good use. The length of time a graduate has held a job is also a determining factor, with older graduates showing themselves to be less at ease with recent changes in the job market. In addition, the study shows that 68.8% of downgraded graduates wish to leave their jobs, thus showing a high level of job dissatisfaction. This early resignation rate reflects a desire for mobility, often constrained by the mismatch between qualifications and jobs. The study recommends adapting educational programs to better match current labor market needs, and improving employment conditions, particularly in the informal sector. Adjusting wages in line with skills is crucial to reducing the perception of downgrading. Public policies must be put in place to promote a better match between qualifications and the jobs on offer. These measures would contribute to a better valuation of graduates and more successful professional integration. Keywords: Downgrading, graduates, Republic of Guinea, logit model, wages |
| Abstract: | Résumé Cette étude, axée sur le déclassement professionnel des diplômés en Guinée, examine les facteurs influençant ce phénomène à travers une approche quantitative. Menée parmi les titulaires de diplômes de 2016 à 2021 de l'Université de N'Zérékoré, elle s'appuie sur une technique d'échantillonnage stratifié pour assurer la représentativité des différents domaines d'études. Une analyse de régression logistique a permis d'évaluer l'impact de plusieurs variables : le sexe, le secteur d'emploi, le salaire et le lieu de résidence. Les résultats révèlent que 65 % des employés diplômés estiment que leurs compétences dépassent les exigences de leur poste. Les diplômés travaillant dans le secteur informel ou percevant des salaires inférieurs à 550 000 FG (environ 60 $[1]) présentent un risque plus élevé de déclassement. De plus, les diplômés entre 2016 et 2019, ainsi que ceux vivant en la haute-Guinée, se sentent davantage déclassés. Ces observations sont en partie liées à la précarité des emplois dans le secteur informel, où les diplômés peinent à valoriser leurs compétences. L'ancienneté du diplôme constitue un facteur déterminant, les diplômés plus anciens se montrant moins à l'aise avec les évolutions récentes du marché du travail. Par ailleurs, l'étude met en évidence que 68, 8 % des diplômés déclassés souhaitent quitter leur emploi, présente ainsi une forte insatisfaction professionnelle. Ce taux de départ anticipé traduit une volonté de mobilité, souvent contrainte, liée à l'inadéquation entre les qualifications et les emplois occupés. L'étude recommande d'adapter les programmes éducatifs pour qu'ils correspondent mieux aux besoins actuels du marché de l'emploi, et d'améliorer les conditions d'emploi, en particulier dans le secteur informel. L'ajustement des salaires en fonction des compétences s'avère crucial pour réduire la perception du déclassement. Les politiques publiques doivent être mises en place pour favoriser une meilleure adéquation entre les qualifications et les emplois offerts. Ces mesures contribuaient à une meilleure valorisation des diplômés et à une insertion professionnelle plus réussie. Mots clés : Déclassement professionnel, diplômé, République de Guinée, modèle logit, salaire. |
| Keywords: | Déclassement professionnel, diplômé, République de Guinée, modèle logit, salaire, African Scientific Journal, Downgrading graduates Republic of Guinea logit model wages, Downgrading, graduates, Republic of Guinea, logit model, wages |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04755157 |