CMI Working Paper
Fighting fiscal corruption: The case of the Tanzania Revenue Authority
CMI authors:
Odd-Helge Fjeldstad
Thematic research group:
Public Sector Reform
Keywords:
Corruption
Tax evasion
Tax administration
Incentives
JEL Classification: H26, H30, J33, K42
Geographical keywords:
Sub-Saharan Africa
Africa: Tanzania.
Odd-Helge Fjeldstad (2002)
Bergen: Chr. Michelsen Institute (CMI Working Paper WP 2002:3) 15 p.
Over the last decade several African countries have undertaken comprehensive reforms of their tax administrations, with the aims of increasing revenue and curbing corruption. This paper examines recent experiences in the fight against corruption in the Tanzania Revenue Authority. Two lessons of broader relevance are highlighted. Firstly, even with relatively high wages and good working conditions, corruption may continue to thrive. In a situation where there is high demand for corrupt services, it is unrealistic to provide tax officers with pay rates that can compensate for the amount gained through bribery. Without extensive and effective monitoring wage increases may produce a highly paid but also highly corrupt tax administration. Secondly, hiring and firing procedures may lead to more corruption. Corrupt tax officers often operate in networks, which also include external actors. The manner in which the administrative reform was implemented in Tanzania, where many of those fired were recruited to the private sector as 'tax experts', seems to have strengthened the corruption networks. This partly explains why the positive process experienced in the initial phase of the new revenue authority was later reversed.
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Fighting fiscal corruption: The case of the Tanzania Revenue Authority
Project/programme:
Taxation, aid and democracy: The evolution of tax systems in Namibia, Tanzania and Uganda
