- Title
- The Price of Simplicity: Skewed and Regressive Taxation in Accra’s Informal Sector
- Creator
- Anyidoho, Nana A, Gallien, Max, Rogan, Michael, Van den Boogaard, Vanessa
- Subject
- To be catalogued
- Date
- 2024
- Type
- text
- Type
- book
- Identifier
- http://hdl.handle.net/10962/478073
- Identifier
- vital:78152
- Identifier
- ISBN
- Identifier
- DOI: 10.19088/ICTD.2024.044
- Description
- International and domestic policymakers have long assumed that informal economies represent an ‘untapped goldmine’ for government coffers. While recent research has highlighted that many informal businesses do pay a range of formal and informal taxes, there has, to date, been little systematic account of their tax burdens. Using a novel dataset of 2,700 informal enterprises in the Accra metropolitan area, we explore the nature and impact of taxation in the informal sector. We find that the majority of informal sector operators pay a range of taxes and fees, which together amount to a significant burden, especially for low earners. These payments are skewed and regressive. Two additional findings emerge in relation to the structure of these taxes. First, the incidence and burden of tax payments is strongly correlated with visibility to the state. Second, taxes and fees are highly regressive, with lower-earning operators paying significantly more in relation to their earnings. These findings have important implications for efforts to tax informal businesses in low- and middle- income countries. The regressivity of efforts to tax the informal sector is often framed as a price worth paying for simplicity. Our study provides both an estimation of this ‘price’, and an underlying argument for collecting this kind of data on taxation of informal enterprises in order to assess real policy impacts.
- Format
- 54 pages, pdf
- Publisher
- Institute of Development Studies
- Language
- English
- Relation
- Anyidoho, N.A,; Gallien, M.; Rogan, M. and van den Boogaard, V. (2024) The Price of Simplicity: Skewed and Regressive Taxation in Accra’s Informal Sector, ICTD Working Paper 195 Brighton: Institute of Development Studies, DOI: 10.19088/ICTD.2024.044
- Rights
- Publisher
- Rights
- Use of this resource is governed by the terms and conditions of the Institute of Development Studies Statement (https://www.ids.ac.uk/)s
- Hits: 4
- Visitors: 6
- Downloads: 1
Collections
Rogan, Michael (Assoc Prof)
RU Books and Book Chapters
RU Department of Economics and Economic History
SDG 08. Decent Work and Economic Growth
| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | SOURCE1 | The Price of Simplicity.pdf | 825 KB | Adobe Acrobat PDF | View Details Download |