Taxing the Informal Economy: The Current State of Knowledge and Agendas for Future Research

This paper reviews the literature on taxation of the informal economy, taking stock of key debates and drawing attention to recent innovations. Conventionally, the debate on whether to tax has frequently focused on the limited revenue potential, high cost of collection, and potentially adverse impact on small firms. Recent arguments have increasingly emphasised the more indirect benefits of informal taxation in relation to economic growth, broader tax compliance, and governance. More research is needed, we argue, into the relevant costs and benefits for all, including quasi-voluntary compliance, political and administrative incentives for reform, and citizen-state bargaining over taxation

Taxing times: taxation, divided societies and the informal economy in Northern Nigeria

This paper challenges the notion that taxing the informal economy provides a mechanism for increasing popular political voice and rebuilding the social contract. It contends that current arguments for taxing the informal economy suffer from a Eurocentric understanding of taxation and state formation, and a fiscally essentialist and undifferentiated notion of the informal economy. Drawing on fieldwork in northern Nigeria, this paper shows that history, gender, wealth and ethno-religious identity influence how taxing the informal economy shapes governance outcomes. Evidence from Nigeria suggests an inverse relationship between informal economy taxation and political voice, posing the risk that increased taxation will exacerbate social divisions rather than rebuild the social contract

Local Government Revenue Mobilisation in Anglophone Africa

This paper examines opportunities and constraints facing local revenue mobilisation in anglophone Africa, with an emphasis on urban settings. It discusses specific revenue instruments and their effects on economic efficiency, income distribution and accountability. In particular, it addresses political and administrative constraints facing various revenue instruments and factors affecting citizens’ compliance. The analysis is illustrated with examples from across anglophone Africa. A general conclusion emerging from the study is that local revenues mobilised in most local government authorities in Africa are necessary but not sufficient to develop and supply adequate services for the fast-growing population. On this basis, areas for further research on local government revenue mobilisation in Africa are identifiedDfI

The fate of Zimbabwe's children: Insights from changes in nutrition outcomes, 1999-2006

The economic situation in Zimbabwe deteriorated significantly between 2000 and 2009. However, little empirical effort has been directed towards analysing changes in outcomes at micro levels during this challenging period. This paper therefore investigates changes in welfare during this period, with specific reference to child health outcomes. In addition to using height and weight for age as proxies for welfare, the analysis further overcomes the absence of consumption data expenditure by using a food variety score to proxy for access to food and an asset index based on principal component analysis to provide an alternative for economic ranking. Results from a comparative analysis of the 1999 and 2005/6 DHS data show that average height and weight for age z-scores for children aged 5 years or under worsened by 19% and 16% respectively while food consumption declined by 34%. These declines were across the entire wealth distribution but were more pronounced among children in middle quartile and the poorest households, but least for the rich. Multivariate regressions of height and weight for age show that a large part of their decline between 1999 and 2005/06 is explained by the deterioration in access to food over this period. Oaxaca-Blinder decompositions show that deterioration in access to food explains half the overall decline in mean height for age

Macroeconomic impact of HIV and AIDS on the Zimbabwean economy: a human capital approach

Zimbabwe is one of the countries severely affected by the HIV/AIDS epidemic. The high prevalence of the disease is not only a health problem but has become an economic problem, yet little effort had previously been directed at establishing the exact magnitude of HIV/AIDS' economic impact. Using a human capital approach which measures the value of production lost as a result of HIV/AIDS - related morbidity and mortality and values an infected person's economic return to society using an individual's annual income, this article establishes that HIV/AIDS has resulted in significant output losses for the Zimbabwean economy. About 13.32% of 1993 GDP at factor cost (was lost due to HIV/AIDS in the years 1994 to 2003). The macroeconomic impact of HIV/AIDS is severe and can therefore not be ignored even if the prevalence drops to zero in the present period.