Tax Reform, Tax Compliance and State-building in Tanzania and Uganda

Abstract

This article sets out to provide a comparative analysis of the effect of tax administration reform on tax performance and quasi-voluntary compliance in Tanzania and Uganda. It aims to reveal two findings via the comparison. Empirically, it is claimed that Tanzania achieved better outcomes in terms of both tax performance and quasi-voluntary compliance in general compared to Uganda. Despite the introduction of similar tax administration reform, the tax administrations of Tanzania and Uganda have developed quite differently. Tanzania’s tax administration effectively changed the strategic and normative factors that enhance quasi-voluntary compliance, whereas Uganda’s tax reforms have been stuck in a muddle. Theoretically, it is proposed that tax performance and quasi-voluntary compliance are interconnected. Quasivoluntary compliance is necessary for achieving high tax performance in an efficient and sustainable manner. High tax performance from competent and fair tax administration improves taxpayers’ willingness to comply voluntarily. Tanzania’s success in tax administration reform led to positive prospects for directing and cementing the processes of state-building with the maturity of state capacity and the concomitant advancement of state–society relations. Cet article tente de fournir une analyse comparative de l’effet de la reforme de l’administration fiscale sur la performance fiscale et le respect quasi volontaire des obligations fiscales en Tanzanie et en Ouganda. Il revele deux resultats de comparaison. De maniere empirique, il est vrai que la Tanzanie a obtenu de meilleurs resultats en termes de performance fiscale et de conformite quasi volontaire en general par rapport a l’Ouganda. Malgre l’introduction d’une reforme de l’administration fiscale similaire, les administrations fiscales de la Tanzanie et de l’Ouganda ont connu une evolution assez differente. L’administration fiscale de la Tanzanie a efficacement modifie les facteurs strategiques et normatifs qui renforcent le respect quasi volontaire, tandis que les reformes fiscales en Ouganda restaient embrouillees. Theoriquement, il s’agit d’associer performance fiscale et conformite quasi volontaire. La conformite quasi volontaire est necessaire pour un rendement fiscal eleve, efficace et durable. Les grandes recettes fiscales obtenues par une administration fiscale competente et equitable renforcent la volonte des contribuables de se conformer volontairement. Le succes de la Tanzanie dans la reforme de l’administration fiscale a ouvert de bonnes perspectives pour orienter et consolider les processus de construction de l’Etat, avec la maturite de ses capacites et la progression concomitante des relations entre l’Etat et la societe.