- Title
- The taxed informal economy: Fiscal burdens and inequality in Accras
- Creator
- Anyidoho, Nana A, Gallien, Max, Rogan, Michael, Van den Boogaard, Vanessa
- Subject
- To be catalogued
- Date
- 2025
- Type
- text
- Type
- article
- Identifier
- http://hdl.handle.net/10962/478084
- Identifier
- vital:78153
- Identifier
- https://doi.org/10.1016/j.worlddev.2024.106879
- Description
- The common assumption that informal economies are untaxed has underpinned arguments that they represent an ‘untapped goldmine’ for government coffers. However, there has been limited empirical engagement with this assumption. While some studies have highlighted that many informal businesses pay both formal and informal taxes, there has been little systematic accounting of these payments. Using a novel dataset of 2,700 informal enterprises in the Accra metropolitan area in Ghana, this article presents the first geographically representative account of the nature, distribution and impact of taxation in an urban informal sector. We find that the majority of informal sector operators in this context pay a range of taxes and fees, which together amount to a significant burden, especially for low earners. Two key findings emerge in relation to the structure of these taxes. First, the incidence and burden of tax payments is highly uneven and strongly correlated with visibility to the state, suggesting that taxation is driven more by patterns of state enforcement than the choices of informal operators. 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 both our conception of informal businesses and efforts to tax informal businesses in low- and middle-income countries.
- Format
- 19 pages, pdf
- Language
- English
- Relation
- World Development, Anyidoho, N.A., Gallien, M., Rogan, M. and van den Boogaard, V., 2025. The taxed informal economy: Fiscal burdens and inequality in Accra. World Development, 187, p.106879, World Development volume 187 number 1 1 19 2025 1873-5991
- Rights
- Publisher
- Rights
- Use of this resource is governed by the terms and conditions of the Elsevier Terms and Conditions Statement (https://www.elsevier.com/legal/elsevier-website-terms-and-conditions)
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Rogan, Michael (Assoc Prof)
RU Department of Economics and Economic History
SDG 08. Decent Work and Economic Growth
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