Impact of Institutional Quality on Tax Revenue in Côte d’Ivoire
Date
2020-11-15
Authors
Beyera, Isabelle
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
Using Gill’s (2000) conceptual framework, the present study is an institutional
analysis aimed at explaining the low level of tax revenue in Côte d’Ivoire. It is
based on data collected from the DPPSE of the country’s Ministry of Economics
and Finance, from the Central Bank of West African States, from the World
Bank, and from various institutional reports and semi-structured interviews
carried out with the staff of the two tax administration general directorates in
Côte d’Ivoire (the DGI and the DGD). The study shows how crucial enhanced
institutional quality is for raising tax revenue in Côte d’Ivoire, notably revenue
from indirect taxes. Indeed, a low level of institutional quality, coupled with high levels of corruption, has contributed to a poor tax-collection performance, which in
turn has hindered the two tax administration general directorates’ work in terms of
tax auditing, tax collection, and tax-base assessment. As a result, there have been
low levels of tax returns, payment of the key taxes and recovery of tax arrears. In
addition, the magnitude of tax exemptions, and of the informal sector, has led to
a reduction in the tax base and has created avenues for corruption within the tax
administration system.