The effects of a risk-based approach to tax examinations: evidence from a tax pilot programme in Tanzania

Abstract Technical assistance and increased use of ICT in tax administrations hold promise for greater revenue collection. Yet, the evidence on how these activities work in the real-world circumstances of developing countries is scant. The paper attempts to fill this gap by evaluating an intervention undertaken jointly by the Finnish and Tanzanian revenue administrations. The programme introduced a new risk-based case selection method for enhancing the effectiveness of firm tax examinations in Tanzania complemented by supplementary staff training and developing management practices. Our results, stemming from a difference-in-differences analysis and administrative data from the Tanzanian Revenue Authority, indicate that the intervention increased the corrected amount of taxable income by approximately 20% during the first year of the new approach.

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Publication Details

Journal
International Tax and Public Finance
Published
2024-09-03
DOI
https://doi.org/10.1007/s10797-024-09858-5
Citations
1
Primary Topic
Taxation and Compliance Studies
Type
article
Field-Weighted Citation Impact
1.13

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article

The effects of a risk-based approach to tax examinations: evidence from a tax pilot programme in Tanzania

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1 citations
International Tax and Public Finance
Taxation and Compliance Studies
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article

The effects of a risk-based approach to tax examinations: evidence from a tax pilot programme in Tanzania

Vincent Leyaro, Ezekiel Swema, Elineema Kisanga, Amina Ebrahim, Ephraim Mdee, Heikki Palviainen, Jukka Pirttilä, Edwin Mhede
article en
1 citations

Abstract

Abstract Technical assistance and increased use of ICT in tax administrations hold promise for greater revenue collection. Yet, the evidence on how these activities work in the real-world circumstances of developing countries is scant. The paper attempts to fill this gap by evaluating an intervention undertaken jointly by the Finnish and Tanzanian revenue administrations. The programme introduced a new risk-based case selection method for enhancing the effectiveness of firm tax examinations in Tanzania complemented by supplementary staff training and developing management practices. Our results, stemming from a difference-in-differences analysis and administrative data from the Tanzanian Revenue Authority, indicate that the intervention increased the corrected amount of taxable income by approximately 20% during the first year of the new approach.

International Tax and Public FinanceVol. 32(3)
University of Helsinki (FI), Tampere University (FI), University of Dar es Salaam (TZ), United Nations University World Institute for Development Economics Research (FI)
Helsingin Yliopisto, Helsingin ja Uudenmaan Sairaanhoitopiiri, Direktoratet for Utviklingssamarbeid
Partnerships for the goals
Openalex Percentile: Top 12%
Taxation and Compliance Studies
1.13
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