Taxing Informality in Malawi: A Comparative Assessment of Policy Instruments and the Role of Digitalisation

by | Aug 6, 2026 | AMTJ, AMTJ 2026 I1

Taxing Informality in Malawi: A Comparative Assessment of Policy Instruments and the Role of Digitalisation

Author: Waziona Ligomeka

ISSN: 2709-8575
Affiliations: N/A
Source: African Multidisciplinary Tax Journal, Volume 6, Issue 1 (2026)

Abstract

Malawi faces sustained fiscal pressures stemming from reduced external assistance, recurring macroeconomic shocks, and rising public debt. Strengthening domestic revenue mobilisation has therefore become a central policy priority. Although the informal economy accounts for a substantial share of employment and economic activity, it remains difficult to tax because many enterprises operate with low and irregular incomes, limited accounting records, cash-based transactions, and weak visibility to tax authorities. This study comparatively examines five instruments used to tax and formalise informal economic activity in Malawi: Advance Income Tax (AIT) on imports, the Block Management System (BMS), Withholding Tax (WHT), Tax Clearance Certificates (TCCs), and Presumptive Tax. Using a qualitative comparative policy-analysis design, the study draws on legislation, Malawi Revenue Authority (MRA) publications, policy reports, and academic literature. The instruments are assessed against four criteria: revenue mobilisation, administrative feasibility, compliance and formalisation outcomes, and long-term sustainability.
The analysis suggests that indirect, transaction-based instruments, particularly WHT and AIT, are comparatively more effective than direct field-based approaches because they operate through observable transactions and third-party intermediaries. TCCs also provide a strong incentive for compliance by linking tax status to access to public procurement, importation, licensing, and other regulated commercial opportunities. By contrast, BMS and Presumptive Tax have modest short-term revenue potential but remain important as mechanisms for taxpayer-discovery and simplified entry points into the tax system. Digitalisation can strengthen all five instruments by improving taxpayer identification, transaction traceability, data integration, and risk-based enforcement. The study concludes that informal-sector taxation should be understood principally as a long-term strategy for expanding tax capacity and supporting gradual formalisation, rather than as an immediate mechanism for extracting substantial revenue from micro-enterprises.

Sustainability Management and Corporate Tax Aggressiveness Among Energy-Intensive Firms in Nigeria

by | Aug 6, 2026 | AMTJ, AMTJ 2026 I1

Sustainability Management and Corporate Tax Aggressiveness Among Energy-Intensive Firms in Nigeria

Authors: Akeem Adetunji Siyanbola, Oyakanmi Mukail Oyesegun, Chukwudi Segun Afolabi, Moses Babatunde Olanisebe, Joshua Kehinde Ogunleye & Tajudeen Adewale Odetayo

ISSN: 2709-8575
Affiliations: N/A
Source: African Multidisciplinary Tax Journal, Volume 6, Issue 1 (2026)

Abstract

This study examines the relationship between sustainability management and corporate tax aggressiveness, proxied by discretionary book-tax differences (DD_BTD), among 56 Nigerian energy-intensive firms between 2018 and 2024. Using 392 firm-year observations and panel regression analysis, the research investigates how Resource Productivity Index (RPI), Deferred Environmental Liabilities (DEL), Human Capital Investment Intensity (HCI), and Social Investment Ratio (SIR) influence tax planning. Descriptive statistics reveal mild average tax aggressiveness (mean DD_BTD = 4.37%) alongside substantial heterogeneity in sustainability investments. Regression results show that environmental proxies (RPI and DEL), grounded in the natural resource-based view, are not significantly associated with tax aggressiveness, suggesting limited disciplinary effects of eco-efficiency and liability recognition. In contrast, both HCI and SIR exhibit strong, statistically significant positive relationships with DD_BTD. Drawing on legitimacy theory, this finding suggests that firms employ social and internal investments as “moral capital” to shield aggressive tax practices from scrutiny. Stakeholder theory further explains that such spending aligns with stakeholder expectations, even while masking opportunistic fiscal behaviour. The political cost hypothesis reinforces this by showing how legitimacy-building investments reduce political costs, thereby enabling tax aggressiveness. The study concludes that, in Nigeria, social sustainability maturity paradoxically facilitates rather than constrains aggressive tax planning.

Dynamic Effects of Risk-Based Tax Audits: Evidence from Rwanda Revenue Authority

by | Aug 5, 2026 | AMTJ, AMTJ 2026 I1

Dynamic Effects of Risk-Based Tax Audits: Evidence from Rwanda Revenue Authority

Authors: Hannah Moreno, Naphtal Hakizimana, Annabel Manley & Orodha Iranzi

ISSN: 2709-8575
Affiliations: N/A
Source: African Multidisciplinary Tax Journal, Volume 6, Issue 1 (2026)

Abstract

This study examines the impact of risk-based tax audits on future compliance behavior. Using administrative data from the Rwanda Revenue Authority (RRA) on nearly 9,000 domestic tax audit cases between 2018 and 2024, the study applies an adapted difference-in-differences methodology for multiple treatment periods. The study finds that tax audits are associated with significant decreases in reported tax declarations in the years following an audit, even as the tax authority’s assigned risk scores decline. These patterns suggest that taxpayers may reduce their reported declarations after being audited, despite appearing less risky to the administration. Taxpayers who incur higher audit penalties exhibit even sharper drops in declarations post-audit, alongside increases in their assigned risk scores. These results are primarily driven by taxpayers identified as non-compliant during their audit, pointing to a strong loss-repair mechanism in which taxpayers may under-declare in an effort to recover audit-related financial losses. However, the findings are not limited to non-compliant taxpayers: even those who faced no penalties experience a temporary decline in declarations up to two years post-audit before returning to prior levels. Taken together, these dynamics indicate that tax audits may reduce compliance in some contexts — even among initially compliant taxpayers, albeit temporarily — a concerning behavioural response that may not be fully captured by the tax administration’s risk scores.

Tax Revenue and Mining Rent Sharing in Africa

by | Aug 5, 2026 | AMTJ, AMTJ 2026 I1

Tax Revenue and Mining Rent Sharing in Africa

Author: Kalo Achille Sanou

ISSN: 2709-8575
Affiliations: N/A
Source: African Multidisciplinary Tax Journal, Volume 6, Issue 1 (2026)

Abstract

This paper examines the impact of natural resources on non-resource tax revenue mobilization, investigating the effect of gold rent sharing on non-resource tax revenues in 19 African gold-producing countries over the period 2009-2020. The study uses the Average Effective Tax Rate (AETR) as a de jure measure of the government’s share of gold rents. Recognizing that the relationship between AETR and non-resource tax revenue may be non-linear, the paper identifies the threshold above which AETR begins to negatively affect these revenues. Literature suggests that mining windfalls can reduce tax pressure on other sectors due to relaxed collection efforts or lower tax rates. The results show a non-linear effect with a single transition threshold, defining two regimes: in the first, AETR positively and significantly impacts non-resource tax revenues, while in the second, the effect is negative and significant. Thresholds differ by mine grade: 53.24% for low-grade, 49.31% for medium-grade, and 33.36% for high-grade mines.

Predicting Customs Fraud Using Machine Learning and Mirror Analysis in Togo

Predicting Customs Fraud Using Machine Learning and Mirror Analysis in Togo

by | Jul 3, 2025 | AMTJ, AMTJ 2025 I1

Predicting Customs Fraud Using Machine Learning and Mirror Analysis in Togo

Authors: Pouwemdéou Tchila, Komlan Kawa Agbanho and Abalo Bouwe

ISSN: 2709-8575
Affiliations: Docteur en sciences économiques, Data scientiste, Chef division analyse risques et suiviévaluation, Office Togolais des Recettes & Chercheur associé au CREAMO (Université de Lomé); Docteur en sciences économiques, Inspecteur des Douanes, Chef section brigade à la Division des Opérations Douanières de Kwadjoviakopé de l’Office Togolais des Recettes; Master en Statistiques & Mathématiques, Data scientiste, Chargé de l’analyse des risques et de la programmation fiscale, Office Togolais des Recettes
Source: African Multidisciplinary Tax Journal, Volume 5, Issue 1 (2025), p. 1–26
https://doi.org/10.47348/AMTJ/V5/i1a1

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Tchila P; Agbanho KK; Bouwe A
Predicting Customs Fraud Using Machine Learning and Mirror Analysis in Togo
African Multidisciplinary Tax Journal Volume 5, Issue 1 (2025) p. 1–26
https://doi.org/10.47348/AMTJ/V5/i1a1

 

Abstract

Customs fraud is an inherent phenomenon of customs administrations and is most often responsible for undermining customs revenue collection. In an attempt to combat this phenomenon, customs administrations, particularly in developing countries, often conduct extensive and unstructured audits. This is not conducive to the fluidity of international trade. The objective of this study is to analyse the extent to which the use of machine learning and mirror analysis improves the identification of customs fraud, while preserving the objective of revenue mobilisation. Using data from the Togolese Revenue Authority and COMTRADE, the findings indicate that mirror analysis and machine learning can better enhance customs fraud detection. To this end, the study recommends the use of these tools in fraud detection.

Predicting Customs Fraud Using Machine Learning and Mirror Analysis in Togo

Understanding the Tax Payment Compliance of Companies: Evidence from Eswatini

by | Jul 3, 2025 | AMTJ, AMTJ 2025 I1

Understanding the Tax Payment Compliance of Companies: Evidence from Eswatini

Authors: Phindile T Masuku, Dr Fabrizio Santoro and Ziyanda T Dlamini

ISSN: 2709-8575
Affiliations: Manager, Research, Strategy and Statistics Division at the Eswatini Revenue Service; Research Fellow, Institute of Development Studies; Economic Analyst, Research, Strategy and Statistics Division at the Eswatini Revenue Service
Source: African Multidisciplinary Tax Journal, Volume 5, Issue 1 (2025), p. 27–50
https://doi.org/10.47348/AMTJ/V5/i1a2

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Masuku PT; Dr Santoro F, Dlamini ZT
Understanding the Tax Payment Compliance of Companies: Evidence from Eswatini
African Multidisciplinary Tax Journal Volume 5, Issue 1 (2025) p. 27–50
https://doi.org/10.47348/AMTJ/V5/i1a2

 

Abstract

This paper investigates corporate income tax (CIT) payment compliance among corporations in Eswatini, an underexplored area critical for revenue-constrained low and middle-income countries. Using a unique administrative dataset (2017–2022), we analyse factors driving timely and full tax payments. We combine descriptive analysis with a more robust Heckman selection model to address sample selection bias. Results show that, while 82% of filed returns included payments, only 55% were fully compliant, and 42% were late. Compliance was higher among larger firms and those in urban tertiary sectors, while smaller and rural firms frequently overpaid, potentially due to penalties. Electronic payments exhibited the highest compliance, whereas mobile and cash payments lagged. Regression analysis highlights company size, provisional tax filings and electronic payments as key compliance predictors. This study contributes to the tax compliance literature with actionable insights for revenue authorities, from the simplification of tax processes for smaller firms to the larger implementation of electronic tax payments.