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Tax revenue in many low-income countries is inadequate for funding growth-promoting investments in public goods and human capital. Increasing tax revenue is particularly pressing given the volatility of natural resource revenues, growing debt distress, and financing needs for pandemic response. At the same time, various e-government initiatives are seeking to transform government functioning by improving service delivery and combatting corruption.
In this talk, World Bank economist Oyebola Okunogbe will describe the potential of technology to transform three core tax administration functions: identifying the tax base, reducing compliance costs, and monitoring compliance. She will also discuss factors that limit the effectiveness of tax digitalization in increasing tax revenues, such as a lack of complementary enforcement capacity.
Okunogbe will describe results from two studies that illustrate the opportunities and challenges of deploying technology in tax mobilization. The lessons from these studies are instructive for thinking about other types of technology used for taxation. The first paper shows that electronic tax filing in Tajikistan reduces the time firms spend on taxes by 40 percent, doubles tax payment, and reduces bribe payment among different subgroups of firms. The second paper finds that using identifying information from a newly developed electronic property database to alert Liberian property owners that their non-compliance has been detected quadruples the tax payment rate but only when the notice includes details on the penalties for non-compliance. The talk will conclude with a reflection on the operational implications of this work for the World Bank¡¯s agenda on improving tax systems.
Oyebola Okunogbe is an Economist in the Human Development team of the World Bank Development Research Group. Her research interests are in governance and political economy, including policies on public finance, nation building, education, employment and gender. Oyebola obtained her PhD in Public Policy and MPA in International Development from Harvard University, and her B.A. in Economics from Dartmouth College. She was born and raised in Nigeria.
Deon Filmer is Director of the Research Group at the World Bank. He has previously served as Acting Research Manager in the Research Group, Co-Director of the World Development Report 2018: Learning to Realize Education¡¯s Promise, and Lead Economist in the Human Development department of the Africa Region of the World Bank. He works on issues of human capital and skills, service delivery, and the impact of policies and programs to improve human development outcomes¡ªwith research spanning the areas of education, health, social protection, and poverty and inequality. He has published widely in refereed journals, including studies of the impact of demand-side programs on schooling and learning; the roles of poverty, gender, orphanhood, and disability in explaining education inequalities; and the determinants of effective service delivery.
The monthly Policy Research Talks showcase the latest findings of the World Bank¡¯s research department, challenge and contribute to the institution¡¯s intellectual climate, and re-examine conventional wisdom in current development theories and practice. These talks facilitate a dialogue between researchers and operational staff and inform World Bank operations both globally and within partner countries. Read More ?