What we hoped for and what we achieved: Tax performance of Semi‐Autonomous Revenue Authorities in sub‐Saharan Africa
| Published date | 01 August 2021 |
| Author | Matilde Jeppesen |
| Date | 01 August 2021 |
| DOI | http://doi.org/10.1002/pad.1952 |
Received: 8 July 2020
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Revised: 10 May 2021
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Accepted: 11 May 2021
DOI: 10.1002/pad.1952
RESEARCH ARTICLE
What we hoped for and what we achieved: Tax performance
of Semi‐Autonomous Revenue Authorities in sub‐Saharan
Africa
Matilde Jeppesen
Department of Political Science, Aarhus
University, Aarhus, Denmark
Correspondence
Matilde Jeppesen, Bartholins Allá7, 8000
Aarhus, Denmark.
Email: mj@ps.au.dk
Abstract
Semi‐Autonomous Revenue Authorities (SARAs) have been introduced widely in the
Global South with the hope of improving tax performance. However, while imple-
menting the reform is an extensive restructuring and expensive endeavour, there is
scarce systematic information on how SARAs have actually performed. This paper
examines the average tax performance effect of introducing a SARA in sub‐Saharan
Africa and finds a positive effect on direct tax revenue, but no effect on indirect or
total tax revenue. This is significant as it implies that implementing a SARA is not a
quick‐fix solution to improving total tax performance, but it does still offer some
advantages. Additionally, the heterogeneous effects on direct and total tax revenue
highlight the importance of how tax performance is evaluated.
KEYWORDS
revenue administration, Semi‐Autonomous Revenue Authority, sub‐Saharan Africa, tax
performance, tax reform
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INTRODUCTION
Semi‐Autonomous Revenue Authorities (SARAs) have been intro-
duced in developing countries all over the world with the intention of
improving tax performance. Particularly in sub‐Saharan Africa,
SARAs have been introduced as part of broader tax reform processes
in the hope of decreasing aid dependence and furthering sustainable
development (Addis Tax Initiative, 2015; Di John, 2009; Morris-
sey, 2015; United Nations, 2015). Despite the promising allure, un-
certainties linger regarding the ability of SARAs to actually improve
tax performance.
The goal of this study is to advance our understanding of how the
introduction of SARAs has affected tax performance in sub‐Saharan
Africa. A ‘SARA’ is generally defined as a semi‐independent admin-
istrative body positioned outside the traditional government hierar-
chy which consolidates all revenue administration into one entity
(following e.g., Moore et al., 2018). This article examines the differ-
ences between countries that established SARAs and those that
maintained revenue administration functions within the traditional
government hierarchy. Some might argue that tax policy is key and
everything else is secondary. However, without a competent and
efficient administration, we cannot expect tax policy to be effective
(Bahl & Bird, 2008, p. 296; Casanegra de Jantscher, 1990, p. 179;
Therkildsen, 2001, p. 112). Despite general recognition of this issue, a
shortcoming of research remains, leaving a critical gap in the un-
derstanding of how administrative arrangements influence tax per-
formance in practice. This neglect is problematic, as implementing a
SARA implies extensive restructuring and expensive reform. Conse-
quently, this paper seeks to fill a gap in the literature by examining
more systematically how the introduction of SARAs in sub‐Saharan
Africa has affected tax performance vis‐à‐vis more traditional
administrative arrangements. This issue will be addressed using a
panel data set consisting of the 48 countries in sub‐Saharan Africa,
from 1980 to 2016, including a total of 1776 observations. The main
independent variable is the presence of a SARA, while the dependent
variable, tax performance, is captured by total, direct and indirect tax‐
Public Admin Dev. 2021;41:115–127. wileyonlinelibrary.com/journal/pad © 2021 John Wiley & Sons Ltd.
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