Improving Tax Collection Efficiency Through the Use of Technology: A Case Study of African Governments

42 Pages Posted: 25 May 2023

Date Written: May 24, 2023

Abstract

Governments in African countries rely heavily on tax revenue to finance their development projects and public services. However, tax collection in many African countries is plagued by inefficiencies, low compliance, and inadequate revenue mobilization. The World Bank estimates that sub-Saharan Africa has one of the lowest tax-to-GDP ratios in the world, with an average rate of 17.2%, compared to the global average of 23.1%.

Tax collection in Africa is hindered by a number of factors, including weak tax administration, low levels of tax compliance, and limited access to technology. The lack of advanced technology and automation in tax administration has resulted in manual and paper-based systems that are inefficient, costly, and prone to corruption. This has made tax collection and compliance difficult, and has limited the amount of revenue that governments can generate from taxes.

To overcome these challenges, African governments are increasingly turning to technology as a means of improving tax collection efficiency and increasing revenue mobilization. Technology adoption in tax administration has the potential to improve tax compliance, reduce the costs of tax collection, and increase revenue collection. The adoption of technology can also improve transparency, accountability, and reduce the potential for corruption in tax administration.

This article explores the use of technology in tax collection in African countries, with a focus on its impact on tax collection efficiency. Specifically, the article examines case studies from Rwanda and Kenya, two African countries that have made significant progress in using technology to improve tax collection efficiency.

The article begins with a literature review that discusses the challenges facing tax collection in African countries, the benefits of technology adoption in tax administration, and the factors that influence tax collection efficiency. The literature review also examines the existing literature on the adoption of technology in developing countries and the lessons that can be learned from these experiences.

Next, the article describes the research design and methodology, including the case studies used in the research and the data collection methods. The case studies focuses on the use of technology in tax collection and administration in Rwanda and Kenya, and the impact of technology adoption on tax collection efficiency in these countries.

The results of the research are presented and analyzed, including an examination of the impact of technology adoption on tax collection efficiency in Rwanda and Kenya. The article discussed the factors that facilitated or hindered technology adoption in these countries, and the lessons that can be learned from their experiences.

The article provides a detailed case study of the tax system and technology adoption in Rwanda and Kenya. The case study examined the current state of tax collection in these countries, the technologies used to improve tax collection, and the impact of these technologies on tax collection efficiency.

Finally, the article concludes by summarizing the main findings of the research and discussed the implications of the results for tax policy in African countries. The article suggests areas for future research on the adoption of technology in tax collection and administration in African countries.

Overall, the article contributes to the existing literature on tax collection efficiency and technology adoption in developing countries. It provides insights into the challenges facing African countries in tax collection and administration, and the potential of technology adoption to overcome these challenges and improve tax collection efficiency.

Keywords: Taxation, digital world

Suggested Citation

Mathias itoe, Mokube and Akepe, Linus Enobi, Improving Tax Collection Efficiency Through the Use of Technology: A Case Study of African Governments (May 24, 2023). Available at SSRN: https://ssrn.com/abstract=4458198 or http://dx.doi.org/10.2139/ssrn.4458198

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