Innovations in Tax Compliance: Conceptual Framework

49 Pages Posted: 15 Nov 2019

Date Written: October 1, 2019

Abstract

This paper presents a conceptual framework for developing more effective approaches to tax reform and compliance. The framework proposes that by combining complementary investments in enforcement, facilitation, and trust, reformers can not only strengthen enforced compliance but can also (a) encourage quasi-voluntary compliance, (b) generate sustainable political support for reform, and (c) create conditions that are more conducive to the construction of stronger fiscal contracts. A key challenge for governments lies in finding the right combination of these three measures -- enforcement, facilitation, and trust?to achieve revenue and broader development goals. The framework proposes greater reliance on locally grounded binding constraints analysis, coupled with careful attention to understanding politics and the drivers of trust in particular contexts, to guide analysis of how best different investments may be combined, prioritized, or sequenced. This framework can help policy makers to think about the right combination of strategies in specific contexts, and thus to allocate resources most effectively.

Keywords: Tax Administration, Macro-Fiscal Policy, Tax Policy, Public Finance Decentralization and Poverty Reduction, Tax Law, Public Sector Economics, Taxation & Subsidies, Economic Adjustment and Lending, Social Analysis, Government Policies, Youth and Governance, Quality of Life & Leisure, National Governance

Suggested Citation

Prichard, Wilson and Custers, Anna Louise and Dom, Roel and Davenport, Stephen R. and Roscitt, Michael Anthony, Innovations in Tax Compliance: Conceptual Framework (October 1, 2019). World Bank Policy Research Working Paper No. 9032, Available at SSRN: https://ssrn.com/abstract=3485915

Wilson Prichard (Contact Author)

University of Toronto

Anna Louise Custers

Independent

Roel Dom

Independent

Stephen R. Davenport

Independent

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