Using Digitalisation Approach to Optimising Potential Property Tax Revenues in the Democratic Republic of Congo

by | Apr 19, 2022 | AMTJ, AMTJ 2022 I1

Using Digitalisation Approach to Optimising Potential Property Tax Revenues in the Democratic Republic of Congo

Author: Luc Mwenelwata Butindi

ISSN: 2709-8575
Affiliations: N/A
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 138-154
https://doi.org/10.47348/AMTJ/V2/i1a8

Abstract

Optimising property tax is beneficial for real estate investors but can also encourage tax avoidance and fraud by economic operators if the state does not put safeguards in place to secure its rights. On the one hand, the state must first control the number of buildings per category and identify the property owners to be taxed. Thanks to digitalisation, tax administrations will change the current approach in favour of modern management tools such as those used in other countries. On the other hand, the state must encourage investors to build more apartment buildings in third- and fourth-tier localities to benefit from the tax relief associated with these properties. These proposed solutions, which are supported by figures from the city of Kinshasa, are used as an example and presented in this article. It highlights that this approach allows the two stakeholders (tax administration and taxpayers) to mutually benefit while effectively reducing the behaviour at fault.

Constraints to Optimising Revenue Potential in Subnational Governments in Kenya: Lessons from Nairobi City County

by | Apr 19, 2022 | AMTJ, AMTJ 2022 I1

Constraints to Optimising Revenue Potential in Subnational Governments in Kenya: Lessons from Nairobi City County

Author: Alex Oguso

ISSN: 2709-8575
Affiliations: Manager – Research & Tax Modelling, Strategy Innovation and Risk Management Department, Kenya Revenue Authority
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 155-178
https://doi.org/10.47348/AMTJ/V2/i1a9

Abstract

Optimisation of revenue potential in the subnational governments in Kenya is core to meeting the their recurrent and development expenditure needs without overrelying on national government transfers. However, the subnational governments face constraints that limit their potential to enhance their revenue collections. Therefore, this study examines the constraints to own source revenue (OSR) collections in Nairobi City County (NCC), assesses challenges to optimal collection of parking fees, and identifies measures to address the challenges inherent to the collection of single business permits (SBPs) debts in the county. The study employed desk review and survey design targeting 170 key informants from the NCC Government and the Kenya Revenue Authority distributed across the 17 sub-counties. The study found that the major constraints to OSR collection in the NCC are inadequate revenue collection tools, equipment and machines (82%); inadequate capacity of the debt collection unit to follow taxpayers who default or delay in making payments (68%); poor tax education/awareness within the county (63%); below par adoption of information and communications technology systems combined with the prevalence of manual revenue collection in making payments (58%); inadequate staff numbers to collect the fees and charges (53%); and lack of legal framework (policies, rules and regulations) for collection of all the revenue streams (51%). The study also found that the main challenges to optimal collection of parking fees in the NCC are high parking fees; system failure; insecurity; unmarked parking lots; interference by parking boys; lack of parking spaces, among others. The study makes suggestions for addressing the challenges in the collection of SBPs debts and provides comprehensive recommendations on dealing with the identified constraints to revenue optimisation in the NCC, applicable to other subnational governments across sub-Saharan Africa.

Contribution to the Assessment and Prediction of Companies’ Tax Risks in the Administration of Tax

by | Apr 19, 2022 | AMTJ, AMTJ 2022 I1

Contribution to the Assessment and Prediction of Companies’ Tax Risks in the Administration of Tax

Authors: Bayoma Wili Samara and C Yao Messah Kounetsron

ISSN: 2709-8575
Affiliations: Macroéconomiste-financier, Chef section budget à l’Office Togolais des Recettes; Maîtres de Conférences Agrégé, directeur de l’Institut Universitaire de Technologie de Gestion à l’Université de Lomé, TOGO
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 179-200
https://doi.org/10.47348/AMTJ/V2/i1a10

Abstract

Tax risk management requires an adequate assessment of the risk based on previously identified determinants. The main objective of this article is to design a tax risk prediction tool. To achieve this objective, data were collected from about sixty big companies in Togo. The scoring method first identified tax risks determinants and then assessed and predicted that risk. The results show that in Togo, company size, transfer price, the leverage effect, the sector of activity, and the reputation of the accounting auditing firm negatively affect big companies’ tax compliance. In contrast, total indebtedness, foreign shareholders’ presence and tax incentives have a positive impact on their tax behaviour. With a predictive power of 75 per cent, this research empirically verifies that modern risk assessment methods improve the performance of the tax administration control system. Consequently, the Togolese Revenue Authority should focus on strengthening its control mechanism for big companies, particularly those involved in the financial sector. It should further prioritise the use of statistical and econometric methods to assess tax risk. However, an error margin of 25 per cent suggests the existence of other factors which could likely improve the appropriateness of the results.

Revenue Enhancements in Kampala, Uganda: Lessons for Other African Cities

by | Apr 19, 2022 | AMTJ, AMTJ 2022 I1

Revenue Enhancements in Kampala, Uganda: Lessons for Other African Cities

Author: Sameera Khan

ISSN: 2709-8575
Affiliations: Manager Technical Assistance, African Tax Administration Forum (ATAF)
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 201-223
https://doi.org/10.47348/AMTJ/V2/i1a11

Abstract

The Kampala Capital City Authority (KCCA) are optimistic that reforms can yield substantial own source revenues if the reform strategy and implementation processes are well designed and executed. Within four years of establishment, the KCCA increased their own source revenue by more than 100 per cent. Kampala’s success can be attributed to improved and modernised administrative processes and procedures, increased capacity, insourcing of requisite skills and knowledge and increased use of automation. The research underscores the successes of the KCCA’s revenue enhancement from own source revenues, especially from the recurrent property tax, to identify lessons for other African local governments. To achieve its objective, the study used a literature review methodology. The evaluation from the literature collected involves a qualitative review of the strategy used by the KCCA since 2010 to enhance its own source revenue. It is noteworthy that research and analysis of impediments, bottlenecks, and key sources of revenue informed the reform strategy that was eventually developed and implemented by the KCCA. In addition, a strong focus was placed on reducing taxpayer compliance costs, increasing voluntary compliance, and increasing taxpayer and stakeholder engagements including the extensive use of social media. Consequently, Kampala’s successes were achieved without the necessity of any legislative changes. Hence, the experience of Kampala offers valuable lessons for many African cities.

Analysis of Tax Compliance Determinants and Property Owners Socio-Economic Profile in Benin

by | Apr 19, 2022 | AMTJ, AMTJ 2022 I1

Analysis of Tax Compliance Determinants and Property Owners Socio-Economic Profile in Benin

Authors: Jonas Fassinou, Pam Zahonogo and Damas Hounsounon

ISSN: 2709-8575
Affiliations: Unité de Formation et de Recherche en Sciences Economiques et de Gestion, Université Thomas Sankara (ex. Université Ouaga II), 12 BP: 417 Ouaga 12, Burkina Faso; Unité de Formation et de Recherche en Sciences Economiques et de Gestion, Université Thomas Sankara (ex. Université Ouaga II), 12 BP: 417 Ouaga 12, Burkina Faso; Ministère de l’Economie et des Finances, République du Bénin
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 224-248
https://doi.org/10.47348/AMTJ/V2/i1a12

Abstract

Implementing efficient tax policy remains a central concern to leaders. Consequently, this article seeks to analyse the determinants of property tax compliance in Benin to ultimately establish the socio-economic profile of property owners. To achieve this, the article first regresses the partial proportional odds model to identify conditional and inf luential factors to taxpayers’ compliance. This is followed by an exploratory multiple component analysis to build a property tax compliance index to establish a socio-economic profile of property owners. The results from a representative sample of 4 575 individuals have shown that in the presence of factors that measure political and social inf luences, the probability that a taxpayer has good tax morale is estimated at 71,978 per cent. The property tax compliance index value sits at 3,076, confirming that Beninese property owners are mostly non-compliant. It was deduced from these results that the typical Beninese taxpayer is a “social taxpayer” strongly inf luenced by social norms. To improve the level of property tax compliance, the tax administrations of developing countries in general and that of Benin in particular, must implement a tax policy based on taxpayers’ profiles. Further studies on the determination of the optimal property tax rate are essential in order to quantitatively assess the extent to which mobilisation performance can be enhanced by taking taxpayers’ profiles into consideration.

An Empirical Evaluation of the Determinants of Property Tax Compliance Rate in Kaduna State, Nigeria

by | Apr 19, 2022 | AMTJ, AMTJ 2022 I1

An Empirical Evaluation of the Determinants of Property Tax Compliance Rate in Kaduna State, Nigeria

Author: Alhasan Usman

ISSN: 2709-8575
Affiliations: Manager (Tax), Federal Inland Revenue Service (FIRS), Nigeria
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 249-267
https://doi.org/10.47348/AMTJ/V2/i1a13

Abstract

This study examines empirically the variables that are driving property tax compliance rates in Kaduna State, Nigeria. In doing so, it relies on primary data sources. During the study, 400 respondents were targeted, but 406 completed questionnaires were analysed. The nature of the data collected necessitated employing the ordered logistic regression model to analyse the data. The result indicated that taxpayers’ satisfaction with the level of property tax digitalisation, the adequacy of property tax law, the administration of property tax and government provision of public goods are important determinants of the property tax compliance rate in Kaduna State. It further found that the average property tax compliance rate in the State is 18.32 per cent, the average satisfaction with the level of digitalisation of property tax is 39.71 per cent, the average taxpayer’s satisfaction with the adequacy of property tax law in the State is 27.68 per cent, the average satisfaction with the administration of property tax is 31.31 per cent and the average taxpayer’s satisfaction with the provisions of public goods is 58.21 per cent. The study recommends that the Kaduna State government should enact a property taxation law to adequately take care of the rate, base, time and procedures of filing and payments of the tax. The digitalisation of the tax should go beyond property registration but should cover all other aspects of digital taxation, ranging from assessment to payment of taxes.

Estimating the Property Taxation in WAEMU Countries: an Analysis

by | Apr 19, 2022 | AMTJ, AMTJ 2022 I1

Estimating the Property Taxation in WAEMU Countries: an Analysis

Authors: Djibril Adékola Fatoumbi and Alastiar Sena Alinsato

ISSN: 2709-8575
Affiliations: Chercheur la Direction Gémérale des I Imyôts du Bénin; Enseignant-chercheur à l’Université d’Abomey-Calaru
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 268-287
https://doi.org/10.47348/AMTJ/V2/i1a14

Abstract

The question of efficient domestic tax revenue mobilisation in developing countries has continued to receive particular attention in recent years. This article evaluates the potential of property tax revenues in Western African Economic and Monetary Union (WAEMU) countries. To this end, three methods were employed using data from the Government Financial Statistics (GFS) of the International Monetary Fund (IMF) and the World Bank’s World Development Indicators (WDI). The Hodrick-Prescott filter method (1980) further allowed for a chronological estimation of the potential of property taxes while the optimisation model of Scully (1995) facilitated a punctual estimation of the potential informs concerning the significance of the parameters. Finally, the quadratic model of Laffer (1981) completed the results of Scully’s model. Overall, the results demonstrate the existence of sub-optimality in the collection of property taxes in WAEMU countries.

Challenges Facing the Property Tax Collection System: a Case Study of the City of Harare Municipality

by | Apr 18, 2022 | AMTJ, AMTJ 2022 I1

Challenges Facing the Property Tax Collection System: a Case Study of the City of Harare Municipality

Author: Simbarashe Hamudi

ISSN: 2709-8575
Affiliations: Transfer Pricing Manager at Tax Matrix
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 288-306
https://doi.org/10.47348/AMTJ/V2/i1a15

Abstract

This article assesses the challenges facing the City of Harare’s property tax collection system and proposes measures to improve revenue collection. The research used interviews and questionnaires to collect data from the selected sample of 180 respondents that included municipality officials as well as 137 residents of Harare and 43 property tax administrators. The research used Excel to analyse the data. The findings from the study show that Harare Municipality is facing administrative challenges that have impacted its ability to meet revenue targets because they are not digitalised. Moreover, major challenges such as unawareness of property tax, inadequacy in the system and challenges associated with the digital era were also identified. This article suggests that the challenges can be resolved by investing in digital technology, infrastructure, taxpayer education, improving service delivery of water, road maintenance, refuse collection and street lighting, reducing political interference and improving transparency on the use of revenue from property tax.

Tax Revenue Potential and Effort in Ethiopia: a Comparative Analysis of Stochastic Frontier Analysis vs Utility Maximisation Function as a New Measure of Tax Effort

by | Apr 18, 2022 | AMTJ, AMTJ 2022 I1

Tax Revenue Potential and Effort in Ethiopia: a Comparative Analysis of Stochastic Frontier Analysis vs Utility Maximisation Function as a New Measure of Tax Effort

Author: Fentaw Leykun Fisseha

ISSN: 2709-8575
Affiliations: Assistant professor of accounting and finance, Bahir Dar University, Ethiopia and head of department of project management, Amhara Leadership Academy, Bahir Dar, Ethiopia
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 307-328
https://doi.org/10.47348/AMTJ/V2/i1a16

Abstract

This article tests the new measure of tax efforts following Dalamagas et al (2019) who  argued that in the context of the Arrow-Debreu economy, with fixed labour supply  and no savings, disposable income is equal to private consumption, a utility function  with two arguments, income, and government spending, is maximised concerning  direct and indirect tax rates. The optimal level of tax revenue is derived from a utility  maximisation process and is shown to be equal to the difference between income and  consumption. As a robustness check, the results of the utility maximisation function  were compared to the findings of the stochastic frontier model. Each model records  very near results for tax effort, tax potential, and tax gaps. The empirical findings  revealed that Ethiopia has a large tax gap and poor tax effort, which is primarily due  to policy choices and enforcement procedures. 

Overview of the Skills Required for Marine Protection and Ocean Governance

by | Apr 17, 2022 | SAJMET, SAJMET V1

Overview of the Skills Required for Marine Protection and Ocean Governance

Author Patrick Vrancken

ISSN: 2790-783X
Affiliations: Incumbent of the SARChI Chair in the Law of the Sea and Development in Africa and chair of the Phakisa MPG Lab’s capacity-building working group
Source: South African Journal of Maritime Education and Training, Volume 1 Issue 1, p. 1-8
https://doi.org/10.47348/SAJMET/2022/i1a1

Abstract

This paper provides an overview of the skills required for marine protection  and ocean governance by focusing on five aspects on a regional basis, namely  maritime knowledge, maritime awareness, maritime safety, maritime security and  maritime integrity. It is concluded that a focus on the development and retention of  the skills required in these regards is necessary for the state to optimally govern the  South African maritime domain in the interests of all South Africans, to ensure  that South Africa protects its lawful interests on the high seas and to enable  South Africa to make its full contribution to the integrated governance of the African maritime domain.