Factors affecting tax compliance attitude in Africa: Evidence from Kenya, Tanzania, Uganda and South Africa

In this study, we explore factors that determine citizens’ tax compliance attitude in Kenya, Tanzania, Uganda and South Africa. The analysis is based on attitude and perception data from the new round of Afrobarometer surveys, which contain more tax-specific information than previous rounds. Using binary logit regression, we find some similarities, but also differences in factors that are correlated with tax compliance attitude in the four countries. In Kenya and South Africa, citizens who perceive that it is difficult to avoid taxes are more likely to have tax compliant attitude than citizens who think avoidance is relatively easier. We also find evidence that individuals who are more satisfied with public service provision are more likely to have a tax compliant attitude in all the four countries. On the other hand, frequent payment to non-state actors, for instance criminal gangs, in exchange for protection, reduces individual’s likelihood to have tax compliant attitude. Furthermore, in Tanzania and South Africa individuals who perceive that their ethnic group is treated unfairly by the government are less likely to have a tax compliant attitude. The degree to which respondents perceive that it is difficult to know what taxes to pay is also negatively correlated with tax compliant attitude in these two countries. Our findings are robust for different econometric specifications. JEL Classification: H26, K34, O23, R51  This paper was prepared with the support of the International Centre for Taxation and Development (www.ICTD.ac). Points of view and possible errors rest entirely on the authors.