On Friday, December 10th, at 02.30 pm, Lisbon time, the NOVAFRICA Center welcomes Moussa Blimpo from the World Bank to present his work on Household Expenditure in the Wake of Terrorism: evidence from high-frequency in-home-scanner data.
Moussa Blimpo, World Bank
In low-income countries, a substantial wedge exists between firms’ knowledge of their tax obligations and what is required by law, especially for microenterprises in the informal sector. We conducted a randomized controlled trial on informal firms in Lom´e, Togo, to test whether alleviating asymmetry in civic information improves tax participation. The intervention trained firms on the tax code and the purpose of taxation to capture the reciprocal nature of taxation central to modern states. We find that participation increased among higher revenue firms and dropped more among lower revenue firms, resulting in a net decrease in tax participation. Further evidence suggests that lowerrevenue firms expanded their economic activities and that the change in the composition of taxpayers likely led to an increase in total tax revenues, offsetting the decrease in participation. These findings indicate that aggressive tax collection practices toward microenterprises can be counterproductive when reinforcing civic information asymmetry.