Troubling Tax Trends: Fewer Africans Support Taxation, More Say People Avoid Paying

Dispatch No. 428| 23 February 2020 Troubling tax trends: Fewer Africans support taxation, more say people avoid paying

Afrobarometer Dispatch No. 428 | Thomas Isbell and Lulu Olan’g

Summary Taxation is a key fiscal tool for domestic resource mobilization for countries around the world. In many African countries, however, weak tax-administration systems limit the ways in which governments can finance their development agendas and provide essential services such as health care, education, and infrastructure (Drummond, Daal, Srivastava, & Oliveira, 2012). Tax revenues are relatively low across the continent. In 2018, 30 African countries had an average ratio of taxes to gross domestic product of 16.5% – less than half the ratio in far wealthier member countries of the Organisation for Economic Co-operation and Development (34.3%) (OECD/AUC/ATAF, 2020). In addition to capacity limitations of government tax agencies, low tax revenues can be related to macroeconomic factors such as large agricultural and informal sectors, which are typically hard to tax (Di John, 2006; Mansour & Keen, 2009; Coulibaly & Gandhi, 2018; Moore, Prichard, & Fjeldstad, 2018). One current debate concerns how to tax highly digitalized businesses – which operate in African countries without necessarily having an easily taxable physical presence – in a way that is fair and doesn’t impede the growth of start-up companies (African Tax Administration Forum, 2020). But low tax revenues can also reflect micro-level factors such as citizens’ willingness to pay taxes (“tax morale”), their knowledge about what they owe and what their taxes are used for, and their perceptions of corruption in the tax administration (OECD, 2019). If citizens regard paying taxes as a fiscal exchange or contractual relationship (Moore, 2004), such perceptions can affect the legitimacy of taxation as a whole (D’Arcy, 2011). Afrobarometer survey data collected in 18 African countries in 2019/2020 show that a majority of Africans endorse their government’s right to collect taxes. But this support for taxation has weakened over the past decade while perceptions that people often avoid paying their taxes have increased sharply. Moreover, many Africans question the fairness of their country’s tax burden, and only half think their government is using tax revenues for the well-being of its citizens. While a majority would pay higher taxes to support young people and national development, most say they find it difficult to get information about tax requirements and uses, and many see tax officials as corrupt and untrustworthy. Such perceptions may play a role in how willingly citizens support – and comply with – their government’s tax administration.

Afrobarometer survey Afrobarometer is a pan-African, nonpartisan survey research network that provides reliable data on Africans’ experiences and evaluations democracy, governance, and quality of life. Seven rounds of surveys were completed in up to 38 countries between 1999 and 2018.

Round 8 surveys were completed in 18 countries between August 2019 and March 2020 before fieldwork was suspended because of the COVID-19 pandemic. Round 8 surveys started up again in October 2020 and are expected to cover a total of at least 35 countries. Afrobarometer conducts face-to-face interviews in the language of the respondent’s choice with nationally representative samples that yield country-level results with margins of error of +/-2 to +/-3 percentage points at a 95% confidence level. This 18-country analysis is based on 26,777 interviews (see Appendix Table A.1 for a list of countries and fieldwork dates). The data are weighted to ensure nationally representative samples. When reporting multi-country averages, all countries are weighted equally (rather than in proportion to population size).

Key findings

▪ By a 2-to-1 margin (61% vs. 32%), Africans say their governments have the right to make people pay taxes. But perceptions of taxation as legitimate are relatively low in Angola (36%), Malawi (37%), and Lesotho (40%), and are also lower among poorer, less educated, and unemployed citizens. o On average across 15 countries surveyed regularly since 2011/2013, support for the government’s right to collect taxes has declined by 9 percentage points, led by a 31-point drop in Malawi. Sierra Leone is the only country where the perceived legitimacy of taxation increased (by 7 points) over the past decade. ▪ Africans tend to think that ordinary people pay too much in taxes and rich people pay too little. Most Africans (70%) endorse the principle of taxing the rich at higher rates to support programs that help the poor. Views are divided on whether the government should make sure that small traders and others in the informal sector pay taxes. ▪ Only half (49%) of Africans believe that their governments use tax revenues for the well-being of their citizens. Two-thirds (67%) want Parliament to monitor how tax revenues are spent. ▪ In most countries, citizens are sharply divided on whether they would be willing to pay higher taxes in exchange for better government services. o But on average, majorities would endorse higher taxes to support programs to help young people (57%) and to finance their country’s development without relying on loans from foreign sources (64%). ▪ Fully half (51%) of Africans say that people in their country “often” or “always” avoid paying taxes they owe. Large majorities say tax avoidance is common in Côte d’Ivoire (74%), Tunisia (74%), Ghana (72%), Gabon (65%), and Sierra Leone (65%). o Perceived tax avoidance has skyrocketed over the past decade. Across 15 countries surveyed regularly since 2011/2013, the proportion of respondents who say that people often/always avoid paying taxes has risen by 20 percentage points, including a 42-point surge in Ghana and double-digit increases in all surveyed countries except Cabo Verde (+ 6 points). ▪ More than six in 10 respondents (62%) say it is difficult to find out what taxes or fees they are supposed to pay, and even more (77%) find it difficult to discover how their government uses tax revenues.

▪ More than one-third (35%) of Africans say that “most” or “all” tax officials are corrupt, and a further 43% see “some” as engaged in graft. Only four in 10 Africans (39%) say they trust the tax or revenue office “somewhat” or “a lot.” ▪ Perceptions of taxation as legitimate are stronger among citizens who trust the tax office and ruling party, and who think the government is using tax revenues to serve the public’s needs.

Legitimacy and fairness of taxation

Government’s right to collect taxes By a 2-to-1 margin (61% vs. 32%), Africans say their governments have the right to make people pay taxes. More than three-fourths of citizens endorse this right in Sierra Leone (89%) and Ethiopia (81%). But in five of 18 surveyed countries, fewer than half agree: Angola (36%), Malawi (37%), Lesotho (40%), Guinea (45%), and Nigeria (49%) (Figure 1).

Figure 1: Does government have the right to make people pay taxes? | 18 countries | 2019/2020

Sierra Leone 89 6 Ethiopia 81 13 Ghana 79 15 Botswana 76 17 Mali 74 24 Kenya 70 25 Gabon 65 34 Namibia 63 22 Côte d'Ivoire 62 35 Tunisia 61 34 Uganda 61 31 18-country average 61 32 Cabo Verde 55 39 Burkina Faso 52 45 Nigeria 49 36 Guinea 45 51 Lesotho 40 51 Malawi 37 60 Angola 36 37

0% 20% 40% 60% 80% 100%

Agree/Strongly agree Neither agree nor disagree/Don't know/Refused Disagree/Strongly disagree

Respondents were asked: Please tell me whether you disagree or agree: The tax authorities always have the right to make people pay taxes?

On average across 15 countries surveyed regularly since 2011/2013, support for the government’s right to collect taxes has declined by 9 percentage points. Support decreased in 13 of the 15 countries, including a remarkable 31-point drop in Malawi (Figure 2). Sierra Leone is the only country where perceived legitimacy of taxation increased over the period (by 7 points).

Figure 2: Changes in support for government right to collect taxes | 15 countries | 2011-2020

Sierra Leone 7 Kenya 2 Namibia -3 Mali -4 Côte d´Ivoire -5 Uganda -5 Botswana -5 Burkina Faso -6 15-country average -9 Ghana -11 Cabo Verde -12 Guinea -14 Nigeria -17 Lesotho -18 Tunisia -19 Malawi -31

-40 -30 -20 -10 0 10 20

Figure shows the change, in percentage points, between survey rounds in 2011/2013 and 2019/2020 in the proportions of respondents who “agree” or “strongly agree” that tax authorities always have the right to make people pay taxes.

Perceptions of the government’s taxation powers as legitimate increase significantly with respondents’ level of education (reaching 74% among those with post-secondary qualifications) and socio-economic status1 (reaching 69% among those with no lived poverty) (Figure 3). Citizens with full-time employment are more likely to agree (69%) than those who are not employed (57%-59%), as are men (64%) compared to women (58%).

1 Afrobarometer’s Lived Poverty Index (LPI) measures respondents’ levels of material deprivation by asking how often they or their families went without basic necessities (enough food, enough water, medical care, enough cooking fuel, and a cash income) during the preceding year. For more on lived poverty, see Mattes (2020).

Figure 3: Government has the right to make people pay taxes | by socio- demographic group | 18 countries | 2019/2020

18-country average 61

Women 58 Men 64

Post-secondary 74 Secondary 63 Primary 54 No formal education 56

High lived poverty 52 Moderate lived poverty 59 Low lived poverty 66 No lived poverty 69

Employed full time 69 Employed part time 63 No employed but looking 59 Not employed, not looking 57 0% 20% 40% 60% 80% 100%

Respondents were asked: Please tell me whether you disagree or agree: The tax authorities always have the right to make people pay taxes. (% who “agree” or “strongly agree”)

Fairness of the tax system In addition to enjoying basic legitimacy, a country’s tax administration should be seen as fair if it wants to encourage popular support and compliance (D’Arcy, 2011). Survey findings suggest concerns about how fairly the tax burden is distributed. Seven in 10 Africans (70%) consider it fair to tax the rich at higher rates than ordinary people in order to fund government programs to help the poor. Opponents of this approach make up fewer than one-third of citizens in every surveyed country (Figure 4). Do your own analysis of Afrobarometer data – But views are more divided on whether the on any question, for any country and survey government should make sure that small round. It’s easy and free at traders and others in the informal sector pay www.afrobarometer.org/online-data-analysis. taxes: On average, a slim majority (53%) of respondents “agree” or “strongly agree,” while 42% disagree. More than seven in 10 citizens support enforcing taxation of the informal sector in Ethiopia (76%) and Ghana (73%). But fewer than one-third of respondents agree in Lesotho (25%), Malawi (29%), Botswana (31%), and Namibia (31%) (Figure 5).

Figure 4: Fairness of higher tax rates for the rich to help the poor | 18 countries | 2019/2020

Tunisia 91 7 Gabon 83 16 Côte d'Ivoire 79 19 Malawi 78 19 Kenya 75 21 Burkina Faso 74 19 Ethiopia 73 22 Mali 73 21 Ghana 73 18 Guinea 72 23 Cabo Verde 71 21 18-country average 70 22 Uganda 66 27 Sierra Leone 66 28 Botswana 63 30 Lesotho 62 32 Nigeria 62 21 Namibia 59 27 Angola 48 30 0% 20% 40% 60% 80% 100%

Agree/Strongly agree Neither agree nor disagree/Don't know/Refused Disagree/ Strongly disagree

Respondents were asked: Do you agree or disagree with the following statement: It is fair to tax rich people at a higher rate than ordinary people in order to help pay for government programs to benefit the poor?

Figure 5: Government should make sure informal sector pays taxes | 18 countries | 2019/2020

100% 76 73 70 69 69 69 80% 64 62 55 55 60% 54 53 41 38 36 31 40% 31 29 25 20% 0%

Respondents were asked: Do you agree or disagree with the following statement: Government should make sure small traders and other people working in the informal sector pay taxes on their businesses?

When it comes to the amount of taxes that ordinary people are required to pay, respondents are four times more likely to say they pay too much rather than too little (48% vs. 12%), while 30% see the amount as just about right (Figure 6). The view that ordinary people are over-taxed is most widespread in Kenya (67%), Uganda (63%), and Gabon (60%). But in eight countries, citizens who think tax rates for ordinary people are right or too low outnumber those who consider them too high: Namibia, Nigeria, Sierra Leone, Mali, Ghana, Botswana, Burkina Faso, and Guinea. The wealthy, on the other hand, are more widely seen as under- than over-taxed. While 36% of respondents say the rich pay too little in taxes, only 19% believe they pay too much, and 29% think they pay about the right amount (Figure 7). Malawi, Ethiopia, and Uganda are the only countries where “too much” responses outnumber “too little.” At the other extreme, more than six in 10 Gabonese (63%) and Tunisians (61%) say wealthy citizens pay too little in taxes.

Figure 6: Are ordinary people taxed too much? | 18 countries | 2019/2020

Kenya 67 21 8 Uganda 63 16 12 Gabon 60 26 12 Cabo Verde 54 28 5 Malawi 52 22 15 Ethiopia 52 32 13 Côte d'Ivoire 51 32 13 Tunisia 50 18 22 18-country average 48 30 12 Guinea 46 37 14 Burkina Faso 46 40 9 Lesotho 45 31 11 Botswana 42 36 9 Ghana 41 35 8 Angola 39 20 18 Mali 39 50 7 Sierra Leone 37 41 13 Nigeria 37 29 13 Namibia 36 34 12

0% 20% 40% 60% 80% 100%

Somewhat too much/Far too much Don't know/Refused About the right amount Somewhat too little/Far too little

Respondents were asked: Do you think that the amount of taxes that ordinary people in [this country] are required to pay to the government is too little, too much, or about the right amount?

Figure 7: Are rich people taxed too much? | 18 countries | 2019/2020

Malawi 37 27 21 Ethiopia 35 26 30 Uganda 34 18 30 Guinea 25 42 29 Lesotho 24 30 29 18-country average 19 29 36 Angola 18 21 32 Kenya 18 24 48 Tunisia 17 9 61 Namibia 17 29 32 Cabo Verde 15 38 27 Burkina Faso 15 46 32 Botswana 15 35 28 Côte d'Ivoire 14 38 39 Mali 13 41 33 Ghana 10 27 37 Gabon 10 24 63 Sierra Leone 9 29 31 Nigeria 9 24 37

0% 20% 40% 60% 80% 100%

Somewhat too much/Far too much About the right amount Don't know/Refused Somewhat too little/Far too little

Respondents were asked: Do you think that the amount of taxes that rich people in [this country] are required to pay to the government is too little, too much, or about the right amount?

Taxes and government accountability Citizens’ willingness to pay taxes may depend in part on what use they think will be made of their money (D’Arcy, 2011; Ali, Fjeldstad, & Sjursen, 2014; Isbell, 2016). On average across 18 countries, only half (49%) of Africans believe that their governments use tax revenues for the well-being of their citizens, while 36% say they do not and 14% take no position, saying they “don’t know” or refusing to answer the question. Burkinabè (71%) and Malawians (70%) are relatively strong in their faith in the government’s use of tax revenues. But only one-third of citizens share this view in Nigeria (34%) and Angola (34%) (Figure 8). In line with some doubts about the government’s use of their tax monies, two-thirds (67%) of Africans say that Parliament should ensure that the president gives a regular accounting of how tax revenues are spent (Figure 9). Cabo Verdeans feel particularly strongly about this requirement (82%). Only Tunisia (49%) and Angola (46%) fall short of majority agreement.

Figure 8: Government uses taxes for well-being of citizens | 18 countries | 2019/2020

100% 80% 71 70 63 59 54 54 53 49 49 49 60% 48 46 45 44 41 37 37 34 34 40% 20% 0%

Respondents were asked: Do you agree or disagree with the following statement: The government usually uses the tax revenues it collects for the well-being of citizens? (% who “agree” or “strongly agree”)

Figure 9: Should Parliament monitor how taxpayers’ money is spent? | 18 countries | 2019/2020

Cabo Verde 82 16 Sierra Leone 77 21 Ghana 77 20 Mali 77 23 Botswana 76 22 Burkina Faso 75 23 Kenya 74 25 Côte d'Ivoire 69 30 Ethiopia 69 29 18-country average 67 30 Gabon 67 33 Uganda 66 32 Guinea 65 34 Nigeria 65 32 Lesotho 64 34 Malawi 57 41 Namibia 52 44 Tunisia 49 47 Angola 46 40 0% 20% 40% 60% 80% 100%

President should be monitored by Parliament Agree with neither/Don't know/Refused President free to act on own

Respondents were asked: Which of the following statements is closest to your view? Statement 1: Parliament should ensure that the president explains to it on a regular basis how his government spends taxpayers’ money. Statement 2: The president should be able to devote his full attention to developing the country rather than wasting time justifying his actions. (% who “agree” or “agree very strongly” with each statement)

While most citizens want an accounting of how tax revenues are used, they are sharply divided in their willingness to pay higher taxes in exchange for better government services. Half (49%) would endorse such a trade-off, but almost as many (42%) would oppose it. Malians and Ethiopians lean most strongly in favor of higher taxes with better services (65% and 63%, respectively), and supporters outnumber opponents in 13 of the 18 countries. But most countries record substantial disagreement on this question (Figure 10). Tunisia, which ranked highest in support for taxing the rich at higher rates to help the poor (91%, Figure 4), records the lowest level of support for increasing taxes in exchange for better services (39%). Support for higher taxes with better services is stronger among younger respondents (54% of those aged 18-25) than among their elders (42% among those aged 66 or above) (Figure 11). Views differ little by respondents’ gender and employment status.

Figure 10: Higher taxes with more services vs. lower taxes with fewer services | 18 countries | 2019/2020

Mali 65 30 Ethiopia 63 35 Guinea 57 40 Gabon 54 44 Burkina Faso 53 41 Côte d'Ivoire 53 44 Namibia 51 38 18-country average 49 42 Botswana 49 40 Cabo Verde 49 36 Ghana 47 40 Sierra Leone 47 42 Nigeria 47 39 Angola 47 30 Malawi 44 53 Kenya 43 50 Uganda 41 54 Lesotho 41 49 Tunisia 39 48

0% 20% 40% 60% 80% 100%

Higher taxes with more services Agree with neither/Don't know/Refused Lower taxes with fewer services

Respondents were asked: Which of the following statements is closest to your view? Statement 1: It is better to pay higher taxes if it means that there will be more services provided by government. Statement 2: It is better to pay lower taxes, even if it means there will be fewer services provided by government. (% who “agree” or “agree very strongly” with each statement)

Figure 11: Prefer higher taxes with more government services | by socio- demographic group | 18 countries | 2019/2020

18-country average 49

Over 65 years old 42 56-65 years 44 46-55 years 48 36-45 years 48 26-35 years 50 18-25 years 54

Post-secondary education 53 Secondary 51 Primary 46 No formal education 49

High lived poverty 46 Moderate lived poverty 49 Low lived poverty 52 No lived poverty 50

Employed full time 48 Employed part time 50 No employed but looking 49 Not employed, not looking 50 0% 20% 40% 60% 80% 100%

However, a majority (57%) of respondents would favor higher taxes to support programs to help young people, especially job creation (Asiamah, Sambou, & Bhoojedhur, 2021), while only about one-third (34%) would be opposed (Figure 12).

Figure 12: Pay more taxes to support youth programs? | 18 countries | 2019/2020

100% 80% 57 60% 40% 34

20% 9 0% Somewhat support/ Somewhat oppose/ Neither support nor Strongly support Strongly oppose oppose/It depends/Don’t know/Refused

Respondents were asked: If the government decided to make people pay more taxes in order to support programs to help young people, would you support this decision or oppose it?

Almost two-thirds (64%) would be willing to pay higher taxes as a way to finance their country’s development without relying on loans from foreign countries and institutions. Only two countries – Cabo Verde and Ethiopia – record stronger support for foreign loans than for using domestic resources, including higher taxes, in order to fuel national development (Figure 13).

Figure 13: Finance development from own resources vs. use external loans | 18 countries | 2019/2020

Gabon 82 17 Tunisia 78 15 Mali 77 22 Kenya 74 23 Burkina Faso 72 27 Ghana 72 18 Nigeria 72 22 Côte d'Ivoire 69 28 Lesotho 66 28 Guinea 65 34 18-country average 64 29 Botswana 62 31 Sierra Leone 61 25 Namibia 58 34 Uganda 58 37 Malawi 56 42 Angola 49 27 Ethiopia 47 50 Cabo Verde 42 49

0% 20% 40% 60% 80% 100% Finance development from own resources Agree with neither/Don't know/Refused Use external loans

Respondents were asked: Which of the following statements is closest to your view? Statement 1: It is important that as an independent nation, we finance development from our own resources, even if it means paying more taxes. Statement 2: We should use external loans for the development of the country, even if it increases our indebtedness to foreign countries and institutions. (% who “agree” or “agree very strongly” with each statement)

Experiences with taxes Despite widespread support for taxation, and in some cases even for raising taxes, citizens report a variety of experiences that present challenges to efficient tax administration, including tax avoidance, difficulty finding out what taxes to pay and what use is made of tax revenues, and perceived corruption among tax officials.

On average across 18 countries, fully half (51%) of Africans say that people in their country “often” or “always” avoid paying taxes they owe. Only 39% say this “rarely” or “never” happens (Figure 14). Ethiopia is an outlier: 81% of respondents say people rarely/never avoid their taxes. Majorities say the same thing in Uganda (57%), Guinea (56%), Malawi (55%), and Mali (52%). But large majorities say tax avoidance is common in Côte d’Ivoire (74%), Tunisia (74%), Ghana (72%), Gabon (65%), and Sierra Leone (65%).

Figure 14: How often people avoid paying taxes | 18 countries | 2019/2020

Ethiopia 81 15 Uganda 57 34 Guinea 56 43 Malawi 55 38 Mali 52 46 Namibia 48 32 Burkina Faso 42 53 18-country average 39 51 Kenya 37 58 Botswana 36 45 Cabo Verde 36 50 Nigeria 35 51 Gabon 34 65 Angola 31 50 Lesotho 29 46 Côte d'Ivoire 24 74 Sierra Leone 20 65 Tunisia 19 74 Ghana 17 72

0% 20% 40% 60% 80% 100%

Rarely/Never Don't know/Refused Often/Always

Respondents were asked: In your opinion, how often, in this country, do people avoid paying the taxes that they owe the government?

Perceived tax avoidance has skyrocketed over the past decade. On average across 15 countries surveyed regularly since 2011/2013, the proportion of respondents who say that people “often” or “always” avoid paying their taxes has increased by 20 percentage points, from 32% to 52%. This includes surges of 42 points in Ghana, 33 points in Kenya, and 32 points in Botswana. This perception grew by double digits in all surveyed countries except Cabo Verde (+6 points) (Figure 15).

Figure 15: Change in tax avoidance | 15 countries | 2011-2020

42 40 33 32

22 20 20 18 18 18 20 18 16 16 13 12 11 6

Figure shows the change, in percentage points, between surveys in 2011/2013 and 2019/2020 in the proportions of respondents who say that people “often” or “always” avoid paying taxes.

At least some non-payers may have an excuse: More than six in 10 respondents (62%) say it’s “difficult” or “very difficult” to find out what taxes or fees they are supposed to pay. Only 28% say this information is easy to obtain. Guineans (86%) and Malawians (85%) are particularly likely to report difficulties, but only one surveyed country, Mali, records (slightly) more citizens who find it easy than find it hard (49% vs. 46%) to determine what they owe (Figure 16). An even larger majority (77%) say that it’s “difficult” or “very difficult” to find out how the government uses its tax revenues. Only 14% say this information is easy to obtain. Here, too, Guinea (93%) and Malawi (88%) rank near the top, joined by Gabon (91%) and Kenya (89%). Angolans (54%) are least likely to report difficulties (though only 19% say it’s easy, while 27% say they “don’t know” or refused to answer the question). Perceptions that it’s difficult to find out what taxes or fees to pay have changed considerably over time, though the average across 14 countries since 2011/2013 has moved little (+2 percentage points). We see the greatest improvement in Sierra Leone, where the share of respondents who report difficulties declined by 23 percentage points. Côte d’Ivoire (+17 points) and Lesotho (+15 points) top the list of seven countries where more citizens say this information is difficult to obtain (Figure 17). Poor citizens are considerably more likely to say it’s difficult to find out what taxes and fees they must pay (69%) than are those who are economically better off (51% of those experiencing no lived poverty). But citizens with post-secondary education (60%) are about as likely as those with no formal education (58%) to find it difficult to obtain this information (Figure 18).

Figure 16: Difficult to get information about taxes | 18 countries | 2019/2020

Difficult to find out Difficult to find out how tax what taxes to pay revenues are used

Guinea 86 93 Malawi 85 88 Uganda 77 83 Gabon 76 91 Kenya 75 89 Lesotho 67 78 Nigeria 65 74 Cabo Verde 65 76 Côte d'Ivoire 63 81 18-country average 62 77 Ghana 61 70 Burkina Faso 58 77 Tunisia 56 75 Namibia 50 70 Ethiopia 50 71 Angola 48 54 Sierra Leone 47 70 Botswana 47 72 Mali 46 78 0% 50% 100% 0% 50% 100%

Respondents were asked: Based on your experience, how easy or difficult is it: To find out what taxes and fees you are supposed to pay to the government? To find out how government uses the revenues from people’s taxes and fees? (% who say “difficult” or “very difficult”)

Figure 17: Changes in perceived difficulty of finding out what taxes to pay | 14 countries* | 2011-2020

Côte d'Ivoire 17 Lesotho 15 Cabo Verde 10 Malawi 10 Guinea 9 Botswana 4 Uganda 4 14-country average 2 Kenya 2 Burkina Faso -3 Nigeria -4 Mali -5 Ghana -6 Namibia -8 Sierra Leone -23 -30 -10 10 30

Figure shows the change, in percentage points, between surveys in 2011/2013 and 2019/2020 in the proportions of respondents who say that it is “difficult” or “very difficult” to find out what taxes and fees they are supposed to pay. *This question was not asked in Tunisia in 2011/2013.

Figure 18: Difficult to find out what taxes or fees to pay | by socio-demographic group | 18 countries | 2019/2020

18-country average 62

Rural 61 Urban 64

Women 62 Men 62

Over 65 years old 60 56-65 years 62 46-55 years 60 36-45 years 62 26-35 years 63 18-25 years 63

Post-secondary education 60 Secondary 64 Primary 65 No formal education 58

High lived poverty 69 Moderate lived poverty 64 Low lived poverty 60 No lived poverty 51

Employed full time 60 Employed part time 64 No employed but looking 62 Not employed, not looking 64 0% 20% 40% 60% 80% 100%

Respondents were asked: Based on your experience, how easy or difficult is it, to find out what taxes and fees you are supposed to pay to the government? (% who say “difficult” or “very difficult”)

In addition to a lack of information about which taxes they owe and how the government uses its revenues, tax compliance may be undermined by public perceptions that tax officials are corrupt and untrustworthy. More than one-third (35%) of respondents say that “most” or “all” tax officials are engaged in corruption, in addition to 43% who see “some” tax officials that way. Perceptions of corruption in the tax office are especially high in Gabon (55% most/all), Mali (50%), and Guinea (50%). At the other extreme, fewer than one in five citizens see widespread corruption in the tax office in Cabo Verde (13%) and Botswana (18%) (Figure 19). Moreover, only four in 10 Africans (39%) say they trust the tax or revenue office “somewhat” or “a lot,” while more than half (53%) profess “just a little” or no trust at all. Botswana is the only surveyed country where a majority (57%) say they trust the tax office. Fewer than one in four citizens consider the tax office trustworthy in Gabon (23%) and Nigeria (24%).

Figure 19: Corruption and trust: Tax officials | 18 countries | 2019/2020

55 Gabon 23 50 Mali 46 50 Guinea 32 45 Uganda 34 42 Ethiopia 47 39 Kenya 43 39 Côte d'Ivoire 43 36 Burkina Faso 47 36 Nigeria 24 35 Sierra Leone 38 35 18-country average 39 34 Malawi 47 34 Ghana 39 29 Angola 28 27 Tunisia 37 27 Namibia 46 21 Lesotho 33 18 Botswana 57 13 Cabo Verde 36 0% 10% 20% 30% 40% 50% 60%

Most/All are corrupt Trust somewhat/a lot

Over the past decade, perceptions of corruption among tax officials have become significantly less prevalent in Nigeria (-23 percentage points) and Sierra Leone (-22 points). But they have worsened in Guinea (+14 points), Tunisia (+8 points), Côte d’Ivoire (+8 points), Malawi (+7 points), Mali (+6 points), Botswana (+5 points), and Burkina Faso (+3 points) (Figure 20).

Figure 20: Changes in perceived corruption among tax officials | 15 countries | 2011-2020

Guinea 14 Tunisia 8 Côte d´Ivoire 8 Malawi 7 Mali 6 Botswana 5 Burkina Faso 3 Cabo Verde 2 Lesotho 2 15-country average 0 Uganda 0 Kenya 0 Namibia -1 Ghana -7 Sierra Leone -22 Nigeria -23 -30 -20 -10 0 10 20 30

Figure shows the change, in percentage points, between surveys in 2011/2013 and 2019/2020 in the proportions of respondents who say that “most” or “all” tax officials are corrupt.

Conclusion While Africans who affirm the state’s right to collect taxes far outnumber those who don’t, perceptions of taxation as legitimate have weakened over the past decade. At the same time, more and more Africans believe that their fellow citizens routinely avoid paying their taxes. Successful tax administration faces a variety of challenges across the continent. Africans tend to think that ordinary people pay too much in taxes, and rich people – who they think ought to pay more in order to help the poor – pay too little. And only half of citizens believe that their governments use tax revenues for the public’s well-being. While a majority would endorse paying higher taxes to support young people and national development, tax avoidance is perceived as widespread, and most citizens say it is difficult to get information about what taxes they owe and how the government uses tax revenues. Moreover, substantial shares of the population see tax officials as corrupt and untrustworthy. In line with earlier findings linking the legitimacy of taxation with perceptions of government service delivery (Ali, Fjeldstad, & Sjursen, 2014; Isbell, 2017), these views may well affect how strongly the public stands behind – and complies with – the government’s right to collect taxes. For example, people who perceive most tax officials as corrupt and untrustworthy are less likely to see taxation as legitimate (Figure 21). The same is true of those who mistrust the ruling political party, and perhaps by extension its agenda funded by tax monies. Perhaps most tellingly, support for the government’s right to collect taxes is 10 percentage points higher if people think that tax revenues are being used to benefit the citizenry.

Figure 21: Legitimacy of taxation, by views on tax office, ruling party, and government use of revenues | 18 countries | 2019/2020

Among respondents who ...

Believe most/all tax officials are corrupt 60

Believe some/none of them are corrupt 64

Trust tax office just a little/not at all 57

Trust tax office somewhat/a lot 70

Trust ruling party just a little/not at all 58

Trust ruling party somewhat/a lot 66

Believe taxes are not used for citizens' 56 well-being Believe taxes are used for citizens' well- 66 being 0% 20% 40% 60% 80% 100%

% who say tax office has right to make people pay taxes

Respondents were asked: How many of the following people do you think are involved in corruption, or haven’t you heard enough about them to say: Tax officials? How much do you trust each of the following, or haven’t you heard enough about them to say: The tax/revenue office? How much do you trust each of the following, or haven’t you heard enough about them to say: The ruling party? Do you agree or disagree with the following statement: The government usually uses the tax revenues it collects for the well-being of citizens? Please tell me whether you disagree or agree: The tax authorities always have the right to make people pay taxes.

References African Tax Administration Forum. (2020). Domestic resource mobilization (digital services taxation in Africa). Policy brief. Ali, M., Fjeldstad, O. H., & Sjursen, I. H. (2014). To pay or not to pay? Citizens’ attitudes toward taxation in Kenya, Tanzania, Uganda, and South Africa. World Development, 64, 828-842. Asiamah, G., Sambou, O. D., & Bhoojedhur, S. (2021). Africans say governments aren’t doing enough to help youth. Afrobarometer Dispatch No. 418. Coulibaly, B. S., & Gandhi, D. (2018). Mobilization of tax revenues in Africa: State of play and policy options. Africa Growth Initiative at Brookings. Policy Brief 148. D’Arcy, M. (2011). Why do citizens assent to pay tax? Legitimacy, taxation and the African state. Afrobarometer Working Paper No. 126. Di John, J. (2006). The political economy of taxation and tax reform in developing countries. WIDER Working Paper No. 2006/74. Drummond, M. P., Daal, M. W., Srivastava, M. N., & Oliveira, M. L. E. (2012). Mobilizing revenue in sub-Saharan Africa: Empirical norms and key determinants. IMF Working Paper No. 12/108. Isbell, T. (2016). Are Africans willing to pay higher taxes or user fees for better health care? Afrobarometer Policy Paper No. 37. Isbell, T. (2017). Tax compliance: Africans affirm civic duty but lack trust in tax department. Afrobarometer Policy Paper No. 43. Mansour, M., & Keen, M. (2009). Revenue mobilization in sub-Saharan Africa: Challenges from globalization. IMF Working Paper 09/157. Mattes, R. (2020). Lived poverty on the rise: Decade of living-standard gains ends in Africa. Afrobarometer Policy Paper No. 62. Moore, M. (2004). Revenues, state formation, and the quality of governance in developing countries. International Political Science Review, 25, 297-319. Moore, M., Prichard, W., & Fjeldstad, O.H. (2018). Taxing Africa: Coercion, reform and development. Zed Books. OECD (Organisation for Economic Co-operation and Development). (2019). Tax morale: What drives people and businesses to pay taxes? OECD/AUC/ATAF (Organisation for Economic Co-operation and Development/African Union Commission/African Tax Administration Forum). (2020). Revenue statistics in Africa 2020.

Appendix

Table A.1: Afrobarometer Round 8 fieldwork dates and previous survey rounds Months when Round 8 Country Previous survey rounds fieldwork was conducted Angola Nov-Dec 2019 N/A Botswana July-Aug 2019 1999, 2003, 2005, 2008, 2012, 2014, 2017 Burkina Faso Dec 2019 2008, 2012, 2015, 2-17 Cabo Verde Dec 2019 2002, 2005, 2008, 2011, 2014, 2017 Côte d'Ivoire Nov 2019 2013, 2014, 2017 Ethiopia Dec 2019-Jan 2020 2013 Gabon Feb 2020 2015, 2017 Ghana Sept-Oct 2019 1999, 2002, 2005, 2008, 2012, 2014, 2017 Guinea Nov-Dec 2019 2013, 2015, 2017 Kenya Aug-Sept 2019 2003, 2005, 2008, 2011, 2014, 2016 Lesotho Feb-March 2020 2000, 2003, 2005, 2008, 2012, 2014, 2017 Malawi Nov-Dec 2019 1999, 2003, 2005, 2008, 2012, 2014, 2017 Mali March-April 2020 2001, 2002, 2005, 2008, 2013, 2014, 2017 Namibia Aug 2019 1999, 2003, 2006, 2008, 2012, 2014, 2017 Nigeria Jan-Feb 2020 2000, 2003, 2005, 2008, 2013, 2015, 2017 Sierra Leone March 2020 2012, 2015, 2018 Tunisia Feb-March 2020 2013, 2015, 2018 Uganda Sept-Oct 2019 2000, 2002, 2005, 2008, 2012, 2015, 2017

Thomas Isbell is a PhD student at the University of Cape Town in South Africa. Email: [email protected]. Lulu Olan'g is a freelance researcher and a PhD student at Nazarbayev University in Kazakhstan. Email: [email protected]. Afrobarometer, a non-profit corporation with headquarters in Ghana, is a pan-African, nonpartisan survey research network. Regional coordination of national partners in about 35 countries is provided by the Ghana Center for Democratic Development (CDD-Ghana), the Institute for Justice and Reconciliation (IJR) in South Africa, and the Institute for Development Studies (IDS) at the University of Nairobi in Kenya. Michigan State University (MSU) and the University of Cape Town (UCT) provide technical support to the network. Financial support for Afrobarometer Round 8 has been provided by Sweden via the Swedish International Development Cooperation Agency, the Mo Ibrahim Foundation, the Open Society Foundations, the William and Flora Hewlett Foundation, the U.S. Agency for International Development (USAID) via the U.S. Institute of Peace, the National Endowment for Democracy, the European Union Delegation to the African Union, Freedom House, the Embassy of the Kingdom of the Netherlands in Uganda, GIZ, and Humanity United. Donations help Afrobarometer give voice to African citizens. Please consider making a contribution (at www.afrobarometer.org) or contact Bruno van Dyk ([email protected]) to discuss institutional funding. For more information, please visit www.afrobarometer.org. Follow our releases on #VoicesAfrica.

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Afrobarometer Dispatch No. 428 | 23 February 2021