Determinants of Properties Tax Revenues in Sub Saharan Africa: Case of Togo

Determinants of Properties Tax Revenues in Sub Saharan Africa: Case of Togo

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

Determinants of Properties Tax Revenues in Sub Saharan Africa: Case of Togo

Authors: Kodzo Senyo Adjeyi, Kokou Essegbe Amaglo and Tsotso Kouevi

ISSN: 2709-8575
Affiliations: Doctorant en sciences de gestion/FaSEG-Université de Lomé/Togo; Doctorant en sciences de gestion/FaSEG-Université de Lomé/Togo; Maître de conférences agrégé en sciences de gestion/FaSEG-Université de Lomé/Togo
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 23-41
https://doi.org/10.47348/AMTJ/V2/i1a2

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Adjeyi, KS, Amaglo, KE and Kouevi, T
Determinants of Properties Tax Revenues in Sub Saharan Africa: Case of Togo
African Multidisciplinary Tax Journal, 2022 Issue 1, p. 23-41
https://doi.org/10.47348/AMTJ/V2/i1a2

Abstract

The objective of this study is to identify the determinants of property tax revenues in Togo. The data relate to the regions and prefectures and were collected from the services of the Togolese Revenue Authority (OTR) and from the Ministry of Justice over a period of five years (2016 to 2020). The results of the descriptive analysis show that the maritime region especially the capital Lomé alone generates more than 98 per cent of property tax revenues. The linear regression revealed that digitisation and awareness efforts influence positively the level of revenue collection. However, land disputes are an obstacle to the success of reforms that can optimise the mobilisation of property tax revenues.

Property Taxation and Efficiency Scores of Metropolitan Municipalities in South Africa

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

Property Taxation and Efficiency Scores of Metropolitan Municipalities in South Africa

Author: Ada Jansen, Onesmo Kaiya Mackenzie and Wynnona Steyn

ISSN: 2709-8575
Affiliations: Associate professor in the Department of Economics at Stellenbosch University; PhD student in the Department of Economics at Stellenbosch University; Economist, Macroeconomic Research Unit at the South African Revenue Service
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 42-60
https://doi.org/10.47348/AMTJ/V2/i1a3

Abstract

Property taxation is a primary source of income for urban municipalities (metros), particularly in South Africa. Property tax collection amongst metros varies, which begs the question of whether differences in tax efficiency scores can be explained by institutional factors, or whether economic factors such as the size of the tax base or the ability to raise other revenues play a role. This article estimates property tax efficiency scores for eight South African metros and considers factors that affect these scores. We use municipal data and apply the data envelopment analysis method to estimate the efficiency scores for property taxation. This is followed by a Tobit regression to evaluate the determinants of these scores. The results show that although metros achieve relatively high efficiency scores, property tax collections can be improved. In addition, economic indicators explain variations in efficiency scores, but financial management remains key to delivering municipal infrastructure.

An Analysis of the Effects of Taxation on Income Inequalities in WAEMU

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

An Analysis of the Effects of Taxation on Income Inequalities in WAEMU

Authors: Pouwemdéou Tchila and Mawussé Komlangan Nézan Okey

ISSN: 2709-8575
Affiliations: Chef section des analyses conjoncturelles à l’Office Togolais des Recettes (OTR) et membre de l’équipe de recherche en économie institutionnelle (ERECI), Université de Lomé-Togo; Maître de conférence agrégé, Chef de département d’économie et responsable de l’équipe de recherche en économie institutionnelle (ERECI), Université de Lomé-Togo
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 61-82
https://doi.org/10.47348/AMTJ/V2/i1a4

Abstract

This article analyses the potential effect that tax instruments have on income inequalities in sub-Saharan Africa particularly in the West African Economic and Monetary Union (WAEMU). Tax instruments are represented by various types of levies and taxes whereas income inequalities are estimated by the Gini index. Using the generalised method of moments over the period from 1990 to 2017, the results demonstrate that value-added tax, excise duties, and port charges have no effect on income inequalities whereas personal income tax and corporate income tax improve income distribution in the WAEMU. However, the globalisation of economies reverses the effect of corporate income tax. Moreover, tax progressivity reduces inequalities while the tax structure has no significant effect on income inequalities. To this end, the study recommends using direct and progressive tax instruments for the fight against inequalities. Similarly, the fight against aggressive tax optimisation must take a central stage in tax policies within an economy that is increasingly open to multinational companies.

Determinants of Municipal Taxes Payment by Informal Micro and Small Business in Côte d’Ivoire

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

Determinants of Municipal Taxes Payment by Informal Micro and Small Business in Côte d’Ivoire

Author: Nohoua Traore

ISSN: 2709-8575
Affiliations: Assistant Professor, Université Alassane Ouattara de Bouaké, Côte d’Ivoire; Membre du Laboratoire ’Analyse et de Modélisation de Politiques Economiques (LAMPE), Bouaké, Côte d’Ivoire Chercheur Associé à la Cellule d’Analyse de Politiques Economiques du CIRES (CAPEC), Abidjan, Côte d’Ivoire
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 83-104
https://doi.org/10.47348/AMTJ/V2/i1a5

Abstract

This article analyses the determinants of municipal tax payments of informal micro- and small businesses in Côte d’Ivoire. The data used relates to 276 informal production units surveyed in the framework of the CAPEC/IDRC project. Using descriptive statistics and the estimation of a Probit model, the study highlights the variables that both negatively and positively inf luence tax payments. It emerged that the perception of the high level of taxes, the fact that the manager of the informal production unit is an Ivorian, the narrowness of the market, and the problems regarding premises negatively affected tax payments. Conversely, the business environment, the electronic payment of invoices, the simplification of procedures, the number of employees and the difficulties in accessing financing enhance the propensity of managers to pay taxes.

Tax Policy in WAEMU: Tax Coordination or Competition?

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

Tax Policy in WAEMU: Tax Coordination or Competition?

Author: Alastaire Sèna Alinsato and Agbokpanzo Ahouidji Tanguy

ISSN: 2709-8575
Affiliations: Laboratoire d’Economie Publique, Faculté des Sciences Economiques et de Gestion – Université d’Abomey-Calavi; Laboratoire d’Economie Publique, Faculté des Sciences Economiques et de Gestion – Université d’Abomey-Calavi
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 105-119
https://doi.org/10.47348/AMTJ/V2/i1a6

Abstract

The objective of this paper is to examine the effect of digitalisation on tax revenue mobilisation in Africa. Using panel data from 40 selected african countries over the period 1980-2017, econometric estimates were implemented using the generalised method of moments. Our results indicated that digitisation has both a positive and significant effect on tax revenue mobilisation in Africa over the study period. They also revealed that economic activity, level of education, financial and industrial development are the channels through which digitalisation affects tax revenue mobilisation in Africa. These results urged policy makers to further promote the digitalisation of African economies for better tax revenue mobilisation. Finally, this study encourages African states to formulate policies with a focus on the factors that should lead to economic growth, human capital formation, financial and industrial development.

Assessing Taxpayers’ Awareness on Their Right to Appeal Property Tax Assessment in Mzuzu City – Malawi

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

Assessing Taxpayers’ Awareness on Their Right to Appeal Property Tax Assessment in Mzuzu City – Malawi

Author: Prince Kaude

ISSN: 2709-8575
Affiliations: Researcher: Compassion Kind Organisation
Source: African Multidisciplinary Tax Journal, 2022 Issue 1, p. 120-137
https://doi.org/10.47348/AMTJ/V2/i1a7

Abstract

Valuation inaccuracy when assessing properties for taxation purposes, which results in taxpayers deciding to evade property taxes due to higher taxes inf luenced by incorrect assessments, affects the economy of the country negatively. This research evaluated how a lack of taxpayer awareness of their right to appeal on estimated property taxes affect property tax compliance in Mzuzu City. Qualitative and quantitative data were collected by administering questionnaires while the study areas were selected based on their planning nature and different state in terms of the income of the dwellers. Taxpayers were selected randomly and the sample from study areas was found by matching the total number of taxable properties in the area to the appropriate sample size. The study has confirmed that the majority of taxpayers do not take any action if an assessment is incorrect due to a lack of knowledge of tax appeals which often leads to tax evasion. Consequently, the government needs to extensively educate taxpayers on tax appeals through, for example, radio and television media.

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.