Recent decades have seen important progress in strengthening country tax systems. Yet many areas of reform have remained stubbornly resistant to major improvements. Overall, revenue collection still falls short of that needed for effective governance and service delivery. Tax collection is too often riddled with high rates of evasion among large corporations and the rich and by disproportionate, though often hidden, burdens on lower-income groups. As countries around the world deal with the large debt burdens induced by COVID-19, an in-depth look at how to strengthen tax systems is especially timely.
Innovations in Tax Compliance: Building Trust, Navigating Politics, and Tailoring Reform takes a fresh look at tax reform. The authors draw on recent research and experience for their new conceptual framework to guide more effective approaches to reform. Building on the achievements of recent decades, they argue for a greater emphasis on the overlapping goals of building trust, navigating political resistance, and tailoring reform to unique local contexts - an emphasis achieved by identifying the most binding constraints on reform. This focus not only can lead to greater compliance, a fairer system, and higher revenues, but also can contribute to building state capacity, sustained political support for further reforms, and a stronger fiscal contract between citizens and governments.
"Taxation of the wealthy is challenging everywhere, and so it is in Albania. The Innovations in Tax Compliance Framework revealed popular support for increasing taxation of the rich in Albania and emphasized the importance of accountability for tax compliance.”
- Irena Xhafa, former Chief of Cabinet, General Directorate of Taxation, and adviser to the Minister of Finance, Albania
In Kaduna, rolling out an effective property tax compliance policy has been a challenge. The Innovations in Tax Compliance Framework has helped us to gauge public perception, ensure fairness and transparency, and establish an innovative and agile approach as we reengineer our tax administration.”
- Muhammad Sani Abdullahi, Commissioner, Planning and Budget, Kaduna State, Nigeria
More focused and fair audits and measures aimed at simplification of tax procedures, as highlighted by the Innovations in Tax Compliance Framework, helped to increase taxpayer confidence and ensure regulatory compliance. We have included elements of voluntary tax compliance in the Tax Administration Development Program of the Republic of Tajikistan for 2020–25 and have made facilitation and improved e-services a central component of modernizing our tax administration.”
- Nusratullo Davlatzoda, Chairman, Tax Committee, the Republic of Tajikistan