Increasing property tax compliance in Liberia
IGC
LSE
University of Oxford
UK aid
Oyebola Okunogbe
July 2020
9 mai 2023
Many developing countries suffer from low tax collection rates. Broadening the tax base and effectively enforcing tax liabilities is crucial for economic and political development.
Property tax compliance in Liberia is limited : an estimated 5% to 10% of properties are registered on the tax roll. Year-on-year compliance for registered properties is also weak.
This study examines the results of two randomised experiments. These experiments involve interventions by the tax authority to manipulate property owners’ perceptions of its capacity to detect and penalize noncompliance.
Research finds that a tax notice that includes the name of the property owner and photograph of the property, as well as information on penalties, triples tax registration and payment relative to a plain notice.
A tax notice that informs delinquent property owners of upcoming enforcement increases compliance compared to a standard reminder, but only in areas where the tax authority had previously carried out more enforcement.
Investments in both detection and enforcement capacity are important for increasing tax compliance.
Increasing property tax complaiance in Liberia
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