The study focused on assessing the level of tax compliance in South Africa and what factors explain the level of compliance.World Values Survey data on South Africa were used to assess the tax side of fiscal policy, how taxpayers’ response to the policy affects compliance and what matters for compliance.Descriptive statistics and an ordered logistic model were employed on longitudinal data.The study revealed that the perceptions, attitudes and behaviours of South African taxpayers have generally shifted from a society that values tax compliance to a nation that justifies tax evasion. The main factors that shape perception and behaviour towards tax compliance are demographic factors, the level of confidence in the government and patriotism. The study recommends considering cognitive and behavioral factors when designing and communicating tax policies to better fit South Africa's unique socio-economic landscape and finance public service delivery.

We explore how teaching basic taxes to future taxpayers helps build the tax culture under low capacity. We use novel randomized survey experiments embedded into a large tax awareness campaign towards young adults in Cameroon. We randomly assigned 1962 public and private secondary school students from 42 classes to tax informational treatments. We provide causal evidence of significant effects on basic tax knowledge and compliance attitudes with differential treatment effects across gender, risk attitudes and family background. Our results also indicate strong effects of the informational treatments for cohorts of students at both tails of the knowledge and tax morale distributions. Interestingly, our findings highlight the high potential for scalability and offer a new perspective on the political economy of tax educational reforms for improved compliance norms towards complying with taxes among younger and potentially entrepreneurial populations.

This paper examines the effect of governance quality on tax revenue mobilisation in Africa using instrumental variables (IV) estimation to address endogeneity concerns. The findings reveal that higher levels of political participation, such as freedom to join political parties, voting, and democratic preference, are significantly associated with increased tax revenue. Tax compliance, captured by trust in tax authorities and the perceived difficulty of avoiding taxes, also enhances revenue mobilisation. While difficulty in accessing education and security services is linked to lower tax revenue, the effect of healthcare access is less consistent. Additionally, institutional trusts correlate positively with tax revenue, suggesting that credible institutions foster voluntary tax compliance. These results highlight the importance of strengthening governance quality to support effective tax policy and improve revenue outcomes. Policymakers should focus on enhancing civic engagement, improving public service delivery, and building institutional trust to bolster domestic resource mobilisation across African countries.

Using data from the latest wave of the Afrobarometer surveys, we examine the heterogeneous effect of corruption perception on tax morale across resource-rich and -poor countries in Africa. We find that perceived levels of corruption among public officials reduces the intrinsic willingness of individuals to pay taxes to the state and the effect is heterogenous across resource-rich and -poor countries in Africa. Specifically, the availability of natural resources (and their exploitation) in a country attenuates the tax morale-reducing effect of corruption perception in Africa. This implies that policies to deepen domestic revenue mobilisation must be context specific.

Mobile money is a key digital alternative to traditional banking in developing countries, yet several African governments have introduced taxes on its transactions. Using a stylized model, cross-country panel survey data, and transaction-level data, we show that such taxes reduce user numbers, transaction frequency, and transaction value, with high tax elasticity. Evidence from Cameroon and Central Africa Republic indicates a significant drop in usage probability and in transaction volume. Unbanked and rural users respond less, suggesting they bear a disproportionate tax burden.

Cryptocurrencies pose substantial challenges to tax enforcement due to their anonymous and decentralized properties, undermining conventional regulatory practices. We study the impact of an ambitious new enforcement initiative aimed at addressing these challenges: domestic third-party reporting of crypto income. We estimate tax compliance and behavioral responses to this new policy by combining unique Danish microdata from domestic crypto platforms, administrative tax records, and cross-border bank transfers. Despite the introduction of domestic third-party reporting, over 90% of crypto investors do not declare crypto income. Moreover, we identify a significant and persistent evasion response to the policy as investors shift trading activity from domestic platforms, subject to third-party reporting, to foreign platforms outside regulatory reach. Our findings underscore the limits of domestic enforcement strategies in addressing tax evasion for decentralized, borderless assets like cryptocurrencies, highlighting the need for international coordination.

The digitalization of tax payments is a key policy focus in low- and middle-income countries, particularly in Africa. This study examines its impact on compliance, leveraging Eswatini’s 2021 zero-cash-handling mandate. Using administrative tax data, we assess (i) the effects of voluntary digital payment adoption and (ii) the mandate’s impact. A staggered difference-in-differences (DiD) approach shows that voluntary adoption reduces late payments by 19 percentage points (25%) and improves payment accuracy by 5.7 percentage points (22%)—rising to 9 percentage points (30%) for strictly digital methods—while having minimal effect on total tax paid. A treatment-intensity DiD strategy finds that the mandate eliminated cash payments but had modest compliance effects, increasing tax payments by 3.5% for individuals and 1.6% for corporations, with no improvement in accuracy. These findings highlight differences between voluntary and mandated adoption, emphasizing the need for policies that account for taxpayer heterogeneity to enhance compliance.

In sub-Saharan Africa, the adoption of mobile money has increased substantially during the last decade and is an important driver of financial inclusion in the region. At the same time, governments have implemented tax on mobile money transfers that may constrain financial inclusion and provide an incentive for cash transfers. The introduction of the taxes has led to heated public debate and reductions in the mobile money tax rates in several countries, making the tax highly salient to many taxpayers. This paper examines the effect of tax salience on the use of mobile money. Using a lab experiment among market traders in Dar es Salaam, we find that increasing the salience of the tax significantly reduces the use of mobile money.