Impact Assessment of the Taxation of the Informal Sector on Tax Revenue in Togo
Author: AGBE Yaovi Fagda Tchota
ISSN: 2709-8575
Affiliations: Docteur en Sciences Economiques, Spécialiste certifié en Evaluation d’impact par le CIFOIT, Chargé d’études à l’Office Togolais des Recettes (OTR), Membre du Centre de Recherche en Economie Appliquée et Management des Organisations (CREAMO) de la Faculté des Sciences Economiques et de Gestion de l’Université de Lomé-Togo
Source: African Multidisciplinary Tax Journal, Volume 6, Issue 1 (2026), p. 1–26
Abstract
This paper assesses the impact of taxing the informal sector on tax revenue in Togo using propensity score matching. An analysis of the determinants of firms’ registration decisions using a probit model shows that operating in the secondary and tertiary sectors negatively affects the probability of firm registration, with a more pronounced effect in the secondary sector. Firms operating in rented premises and having a lease agreement, as well as those headed by wealthy and educated individuals who hold a Tax Identification Number, are more likely to register. Regarding the impact assessment, the results indicate that taxing the informal sector contributes, on average, to an increase in tax revenue per firm, with the estimated increase ranging from 149,245 FCFA to 149,437 FCFA.