Tax evasion and corruption in the tax administration hit developing countries hard. The purpose of this thesis is to shed light on these phenomena in three African countries: South Africa, Tanzania and Uganda. The thesis is organised in three parts, each containing two essays. The essays are all published internationally.

Part I examines factors determining citizens' compliance behaviour, and is based on survey data from local government authorities in Tanzania and South Africa. The research finds that the way taxes and charges are collected may impact significantly on taxpayers' compliance. Excessive use of sanctions and force are likely to fuel tax resistance.

This finding leads to Part II of the thesis, which focuses on different tax enforcement regimes and what factors determine the extent of coercion practiced in revenue collection. The analysis finds that although corrupt and extortive tax collection may raise revenues in the short run, sustained development cannot occur in an institutional framework that fosters such practises. Thus, a starting point for policy debates in this area is to design and implement measures to fight fiscal corruption.

Such measures are analysed in Part III, which examines recent experiences to fight corruption in the Tanzania and the Uganda Revenue Authorities. The research finds that systemic tax evasion and fiscal corruption must, at least to some extent, be understood in the context of a political economy in which social relations rule out the formal bureaucratic structures and positions. Tax officers are often seen by their families and networks as important potential patrons who have access to money, resources, and opportunities that they are morally obliged to share. Hence, increased salaries may lead to increased social obligations, which again may push tax officers into taking bribes to accommodate the growing expectations around them. If these problems, which are rooted in social norms and patterns of behaviour rather than administrative features, are overlooked, the result may be to distort incentives. As a consequence, reforms that otherwise seem consistent with principles of good public financial management are undermined.

The thesis concludes that the government's credible commitment to fight corruption and transparent use of tax revenues are crucial to improve taxpayers' compliance.

Odd-Helge Fjeldstad

Research Professor, Coordinator: Tax and Public Finance

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