1

Factors affecting tax compliant attitude in Africa:

Evidence from Kenya, Tanzania, Uganda and South Africa

Merima Ali
merima.ali@cmi.no

OddHelge Fjeldstad
odd.fjeldstad@cmi.no

Ingrid Hoem Sjursen
ingrid.sjursen@cmi.no

Chr.Michelsen Insitute
Bergen, Norway

Abstract: In this study, we explore factors that determine citizens tax compliance behavior in
Kenya, Tanzania, Uganda and South Africa using attitude and perception data from the new round
5 of Afrobarometer surveys. Using a binary logit regression, we find some similarities, but also
differences in factors that are correlated with tax compliance attitude in the four countries. An
increase in the perception of individuals about the difficulty of evading taxes is found to increase
the likelihood of tax compliant attitude in Kenya and South Africa. 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. However, frequent payment to nonstate actors, e.g. to
criminal gangs in exchange for protection, reduces individuals tax compliant attitude.
Furthermore, those individuals who perceive that their ethnic group is treated unfairly are less
likely to have a tax compliant attitude in Tanzania and South Africa. Tax knowledge is also
significantly correlated with tax compliant attitude in Tanzania and South Africa. These findings
are robust for different econometric specifications.

1. Introduction
Raising moie uomestic ievenue is a piioiity foi most subSahaian Afiican countiies (Biummonu
et al. 2u12). Nobilizing ievenue is a way foi goveinments to cieate fiscal space, pioviue
essential public seivices, anu ieuuce foieign aiu anu single iesouice uepenuence. Bowevei, the
uomestic tax bases in most Afiican countiies aie unueimineu by wiuespieau tax avoiuance anu
evasion (INF 2u11). Although taxpayei noncompliance is a continual anu giowing global
pioblem (NcKeichai anu Evans 2uu9), many inuications suggest that ueveloping countiies,
many of them in SubSahaian Afiica, aie the haiuest hit (Cobham 2uuS; Fuest anu Rieuel 2uu9).
Bealing with the pioblem of tax evasion iequiies at least some unueistanuing of the factois
unueilying the inuiviuual taxpayeis uecision whethei to pay oi evaue taxes. Bowevei, little is
known about tax compliance behavioi in ueveloping countiies (Anuieoni et al. 1998; B'Aicy
2u11; Fjelustau anu Semboja 2uu1). This stuuy attempts to exploie factois that ueteimine
citizens tax compliance behavioi in selecteu Afiican countiies using attituue anu peiception
2

uata fiom a new iounu of Afiobaiometei suiveys (Rounu S; 2u1112)

1
. This suivey incluues a
seiies of questions about tax that aie new anu not incluueu in pievious iounus of
Afiobaiometei. This allows foi a moie compiehensive empiiical analysis of tax compliance
attituues baseu on nationally iepiesentative public opinion suivey uata fiom the selecteu
Afiican countiies.
Stuuying what factois ueteimine tax compliance attituue anu behavioi in Afiica is not only of
acauemic inteiest; it is also impoitant fiom a policy peispective. Attempts to bioauen the tax
base must builu on insights into how citizens expeiience anu peiceive the tax auministiation
anu enfoicement, anu whethei anu how theii tax behavioi is coiielateu with how they peiceive
the state. Noie systematic anu coheient infoimation on taxpayei attituues aie theiefoie
iequiieu foi bettei analysis anu a moie infoimeu tax policy uesign. By empiiically establishing
which factois affect tax compliance in the selecteu countiies, the papei ueiives feasible policy
iecommenuations foi policy makeis anu ievenue auministiations.
In the stuuy, we use an inuiiectly phiaseu question to captuie tax compliance attituue of
inuiviuuals in oiuei to avoiu uiiect implication of wionguoing by the iesponuent. In the
questionnaiie, iesponuents weie askeu to state theii opinion about othei people who uo not pay
taxes that they owe on theii income. They weie askeu to state whethei they think the action of
othei people who uo not pay taxes on theii income is not wiong at all, wiong but
unueistanuable oi wiong anu punishable. Baseu on these iesponses, inuiviuuals aie
consiueieu as having a tax compliant attituue if theii iesponse is wiong anu punishable anu
noncompliant attituue if theii iesponse is eithei not wiong at all oi wiong but
unueistanuable. 0sing a binaiy logit iegiession, we finu some similaiities, but also uiffeiences
in factois that aie coiielateu with tax compliance attituue in the foui countiies. An inciease in
the peiception of inuiviuuals about the uifficulty of evauing taxes is founu to inciease the
likelihoou of tax compliant attituue in Kenya anu South Afiica. We also finu eviuence that
inuiviuuals who aie moie satisfieu with public seivice piovision aie moie likely to have a tax
compliant attituue in all the foui countiies. Bowevei, fiequent payment to nonstate actois, e.g.
to ciiminal gangs in exchange foi piotection, ieuuces inuiviuuals tax compliant attituue.
Fuitheimoie, those inuiviuuals who peiceive that theii ethnic gioup is tieateu unfaiily aie less
likely to have a tax compliant attituue in Tanzania anu South Afiica. Tax knowleuge is also
significantly coiielateu with tax compliant attituue in Tanzania anu South Afiica. These finuings
aie iobust foi uiffeient econometiic specification, wheie we incluue all the thiee iesponses of
inuiviuuals iegaiuing othei peoples action about tax in an oiueieu logit iegiession.
The iemainuei of the papei is stiuctuieu as follows: The next section pioviues a biief
piesentation of theoietical peispectives on tax compliance. Section S piesents the uata anu
ieseaich uesign. Sections 4 anu S piesent the iesults. Finally, section 6 summaiizes anu
concluues.

1
Afrobarometer is an independent, nonpartisan research project which consists of national sample surveys on the
attitudes of citizens in selected countries towards democracy, markets, civil society and other aspects of
development. Because the instrument asks a standard set of questions, countries can be systematically compared.
For further details, see www.afrobarometer.org
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2. Understanding taxpayer attitudes and behavior: theoretical foundations

Nouels of taxpayei behavioi, incluuing the uecision whethei oi not to pay taxes, tenu to ieflect
one of five theoiies that can be iefeiieu to as: (1) economic ueteiience; (2) fiscal exchange; (S)
social influences; (4) compaiative tieatment; anu (S) political accountability. These aie to some
extent inteiconnecteu, anu some iepiesent an evolution of otheis.
Economic deterrence
The economic ueteiience theoiy states that taxpayeis behavioi is influenceu by factois such as
the tax iate ueteimining the benefits of evasion, anu the piobability of uetection anu penalties
foi fiauu which ueteimine the costs (Allingham anu Sanumo 1972; Beckei 1968).
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This implies
that if uetection is likely anu penalties aie seveie, few people will evaue taxes. In contiast, unuei
low auuit piobabilities anu low penalties, the expecteu ietuin to evasion is high. The mouel then
pieuicts substantial noncompliance. Although the mouel has been ciiticizeu foi focusing
exclusively on the coeicive siue of compliance, at the expense of the consensual (Sanumo 2uuS)
S
,
theie is some eviuence to suppoit the ielevance of ueteiience stiategies to auuiessing non
compliance (NcKeichai anu Evans 2uu9). Foi example, the feai of getting caught, oi the
piobability of uetection, has been founu in some contexts to be an effective stiategy to inuuce
tiuthful behavioi. The theoietical piinciples of economic ueteiience have also been wiuely
auopteu by tax auministiations when ueveloping enfoicement stiategies that iely piincipally on
penalties anu the feai of getting caught.

Fiscal exchange
The fiscal exchange theoiy suggests that the piesence of goveinment expenuituies may motivate
compliance anu that goveinments can inciease compliance by pioviuing goous that citizens
piefei in a moie efficient anu accessible mannei (Cowell anu uoiuon 1988; Levi 1988; Tilly
1992; Nooie 2uu4; 1998). Alm et al. (1992) note that compliance incieases with (peiceptions
of) the availability of public goous anu seivices. Accoiuingly, the main concein of taxpayeis is
what they get uiiectly in ietuin foi theii tax payments in the foim of public seivices (quid pro
quo). In this peispective, taxation anu the piovision of public goous anu seivices aie inteipieteu
as a contiactual ielationship between taxpayeis anu the goveinment (Nooie 2uu4). Inuiviuuals
may pay taxes because they value the goous pioviueu by the goveinment, iecognizing that theii
payments aie necessaiy both to help finance the goous anu seivices anu to get otheis to
contiibute (Fjelustau anu Semboja 2uu1). The existence of positive benefits may inciease the
piobability that taxpayeis will comply voluntaiily, without uiiect coeicion. Although most
taxpayeis cannot assess the exact value of what they ieceive fiom the goveinment in ietuin foi
taxes paiu, it can be aigueu that they have geneial impiessions anu attituues conceining theii
own anu otheis teims of tiaue with the goveinment (Richupan 1987). It is then ieasonable to
assume that a taxpayeis behavioi is affecteu by hishei satisfaction oi lack of satisfaction with
hishei teims of tiaue with the goveinment. Thus, if the system of taxes is peiceiveu to be
unjust, tax evasion may, at least paitly, be consiueieu as an attempt by the taxpayei to aujust his

2
Nearly all economic approaches to tax evasion are based on this economics-of-crime framework (Becker
1968). Cowell (1990) offers an insightful review of this analytical framework.
3
For instance, empirical data from Western countries reveal that taxpayers pay much more tax than what could
be accounted for even by the highest feasible levels of auditing, penalties and risk-aversion. The question
therefore has switched from why do people not evade taxes to why do people pay? Alm, J ., G. H.
McClelland & W. D. Schulze 1992. Why do people pay taxes? Journal of Public Economics, 48, 21-38,
Slemrod, J . 1992. Why people pay taxes: tax compliance and enforcement. In: Slemrod, J . (ed.). Ann Arbor: The
University of Michigan Press..
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teims of tiaue with the goveinment. The fiscal exchange theoiy has ieceiveu much attention anu
is well establisheu theoietically. Empiiical eviuence to suppoit the theoiy is, howevei,
ambiguous (B'Aicy 2u11: S6).

Social influences
In the social influence mouel, compliance behavioi anu attituues towaius the tax system is
thought to be affecteu by the behavioi anu social noims of an inuiviuuals iefeience gioup
(Snavely 199u). It is ieasonable to assume that human behavioi in the aiea of taxation is
influenceu by social inteiactions much in the same way as othei foims of behavioi (ibiu).
Compliance behavioi anu attituues towaius the tax system may theiefoie be affecteu by the
behavioi of an inuiviuuals iefeience gioup such as ielatives, neighbois anu fiienus. Theiefoie, if
a taxpayei knows many people in gioups impoitant to him who evaue taxes, hishei
commitment to comply will be weakei. 0n the othei hanu, social ielationships may also help
uetei inuiviuuals fiom engaging in evasion in feai of the social sanctions imposeu once
uiscoveieu anu ievealeu publicly. Theoietical ieseaich on heiu behavioi in economic situations
(Baneijee 1992; Sah 1991) also inuicates that social influences may affect compliance, in
paiticulai by affecting the peiceiveu piobability of uetection. 0ne of the most consistent finuings
about taxpayei attituues anu behavioi in Westein countiies is that those who iepoit compliance
believe that theii peeis anu fiienus (anu taxpayeis in geneial) comply, wheieas those who
iepoit cheating believe that otheis cheat (Yankelovich et al. 1984). Eviuence suggests that
peiceptions about the honesty of otheis may affect compliance behavioi.

Comparative treatment
The compaiative tieatment mouel is baseu on equity theoiy anu posits that auuiessing
inequities in the exchange ielationship between goveinment anu taxpayeis woulu iesult in
impioveu compliance (NcKeichai anu Evans 2uu9). Citizens may not consiuei theii ielationship
with the state in a vacuum wheie both paities aie the only actois. Likewise, they may not think
about theii fellow citizens without consiueiing theii own ielationship with the state. They may
also consiuei how the state tieats them ielative to theii fellow citizens. This juugment is likely to
affect not only theii juugment of the state, but also how they view theii fellow citizens (B'Aicy
2u11: 7). If the state tieats ceitain gioups piefeientially, this may coloi the citizens ielationship
with the state anu the gioup ieceiving favois. A ciucial vaiiable is then not just what a peison
gets fiom the state, but what the peison gets fiom the state (anu how the state tieats the peison)
ielative to those who aie in the peisons wiuei national community. This social psychology
mouel highlights the impoitance of equity theoiy in the stuuy of compliance anu taxpayei
behavioi.

Political legitimacy
Finally, accoiuing to the political legitimacy theoiy, tax compliance is influenceu by the extent
that citizens tiust theii goveinment (Taylei 2uu6; Kiichlei et al. 2uu8; FauvelleAymai 1999).
Legitimacy coulu be uesciibeu as belief oi tiust in the authoiities, institutions, anu social
aiiangements to be appiopiiate, piopei, just anu woik foi the common goou. Political scientists
have auuiesseu how political legitimacy anu civic iuentification aie fosteieu. (Peisson 2uu8)
aigues that Afiican countiies that upon inuepenuence emphasizeu builuing national ovei ethnic
iuentity have been moie successful than those who alloweu ethnicity to become the main
animus of politics.

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In the following empiiical analysis we will examine the extent to which the uiffeient theoiies of
taxpayei compliance contiibute to explaining peoples attituue towaius taxation in the selecteu
Afiican countiies.
3. Data and descriptive analysis
The main souice of uata foi the analysis is the Sth iounu of Afiobaiometei suivey collecteu in
2u112u12. The suivey collects uata on public attituues on uemociacy, goveinance, maikets,
taxation anu civil society, in moie than 2u Afiican countiies. The questionnaiie also incluues a
seiies of questions about tax, ueiiveu fiom the theoiies outlineu in the pievious section. Nost of
these questions aie new anu not incluueu in the pievious iounus of Afiobaiometei. Because the
questionnaiies aie similai acioss countiies, the uata allows a compiehensive empiiical analysis
of taxation theoiy in Afiican societies anu foi testing the ielevance of the vaiious theoiies about
taxpayei compliance. Nationally iepiesentative samples of inuiviuuals who aie moie than 18
yeais olu aie selecteu both in iuial anu uiban aieas of the uiffeient countiies. 2S99 ianuomly
selecteu inuiviuuals weie inteivieweu fiom 8 anu 9 uistiicts in Kenya anu South Afiica each,
iespectively. In Tanzania anu 0ganua, the sample size is 24uu in each countiies anu the
iespective numbei of uistiicts is 26 anu S.

Kenya, Tanzania anu 0ganua weie chosen foi this stuuy because they aie situateu in the same
geogiaphic iegion anu aie all membeis of the East Afiican Community (EAC).
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Looking at
similaiities anu uispaiities in attituues towaius taxation in these thiee countiies coulu pioviue
useful infoimation about wheie they can make a collective effoit to impiove tax compliance anu
wheie countiy specific policies aie neeueu. South Afiica makes an inteiesting compaiison
because it has a moie uevelopeu anu extensive tax system as well as significantly highei uNI pei
capita than the EastAfiican countiies (see Table 1). As uepicteu in Table 1, theie aie also
institutional anu stiuctuial uiffeiences between the foui countiies. Though South Afiica is iateu
as the iichest anu most uemociatic countiy, it is also the most income unequal. Kenya has the
seconu highest uNI pei capita, but scoies seconu woist in teims of uemociacy anu inequality,
while Tanzania is the seconu most uemociatic anu has the lowest inequality. 0ganua has the
lowest uNI pei capita, scoies seconu best on inequality anu seconu woist on the uemociacy
inuex.
[Table 1 here]
Whit tax ievenues accounting foi 29% of uBP, South Afiica has the highest tax to uBP iatio of
the foui countiies. Since the abolishment of apaitheiu in 1994, the countiy has gone thiough
majoi tax iefoims (0ECBBAC 2u12). The iatio of tax to uBP iose fiom 2S% in 2uu4 to 29% in
2u1u. Although tax avoiuance anu evasion aie still consiueieu to be majoi challenges, the
implementation of populai taxpayei outieach anu euucation piogiams by the South Afiican
Revenue Seivice (SARS), combineu with new enfoicement techniques, have leu to impiovements
in public attituues to the impoitance of paying taxes (0ECBBAC 2u12: S1; SARS 2u11). Kenya
has the seconu laigest shaie of collecteu tax ievenues with 19.S% of uBP. Although this is
ielatively high compaieu to many othei Afiican countiies (Woilu Bank 2u12), the tax buiuen is
unevenly uistiibuteu, leaving a laige fiaction of the economy untaxeu (Waiis et al. 2uu9).

4
We do not have access to data from the two other members of EAC, Burundi and Rwanda.
6

Laige effoits to impiove taxpayei compliance have been maue by Tanzania Revenue Authoiity
in iecent yeais. Bespite this, the countiy comes thiiu with a tax to uBPiatio of 14% in 2u1u. Tax
evasion is a majoi challenge anu coaise estimates suggest that loss in tax ievenue uue to tax
evasion amounteu to one sixth of the entiie Tanzanian buuget in the fiscal yeai 2uu91u. As a
iesult, the countiy iemains heavily uepenuent on aiu which, accoiuing to the Afiican
Bevelopment Bank, accounts foi about S4% of the goveinments buuget (AfBB 2u1ua) .
With 12% of uBP acciuing fiom tax ievenue, 0ganua has the lowest tax to uBPiatio of the
stuuieu countiies. While the tax shaie is almost uoubleu fiom 199192 when the iatio was only
6.7%, the giowth in tax ievenue collection has been slow the last uecaue (AfBB 2u1ub).
3.2 Measuring tax compliance attitude
In the questionnaiie, iesponuents weie askeu uiiectly if they have iefuseu to pay taxes oi fees
that they oweu to the goveinment uuiing the last yeai. Bowevei, stuuies show that inuiviuuals
tenu to answei untiuthfully when askeu questions about sensitive issues such as theii own tax
payment. Tax compliance is theiefoie likely to be oveiiepoiteu in suivey uata using such
measuies. While some authois aigue that obtaining ieliable quantitative infoimation about tax
compliance behavioi is piactically impossible, otheis (Kaufmann (1997) anu Reinikka anu
Svensson (2uu6)) maintain that application of appiopiiate suivey methous anu inteiview
techniques comes a long way in solving the pioblem. Following the woiks of Reinikka anu
Svensson (2uu6) on theii woik on coiiuption, we use an inuiiectly phiaseu question to captuie
tax compliance in oiuei to avoiu uiiect implication of wionguoing by the iesponuent. In the
questionnaiie, iesponuents weie askeu to state theii opinion about othei people who uo not pay
taxes that they owe on theii income. They weie askeu to state whethei they think the action of
othei people who uo not pay taxes on theii income is not wiong at all, wiong but
unueistanuable oi wiong anu punishable. Baseu on these iesponses, inuiviuuals aie
consiueieu as having a tax compliant attituue if theii iesponse is wiong anu punishable anu
noncompliant attituue if theii iesponse is eithei not wiong at all oi wiong but
unueistanuable.
Figuie 1 shows the shaie of iesponuents with tax compliant attituues against the natuial
logaiithm of uNI pei capita in the foui countiies togethei with Benin, uhana, Nalawi anu
Zimbabwe. The figuie uepicts that theie is positive coiielation between uNI pei capita anu shaie
of inuiviuuals with taxcompliant attituue, with ielatively iichei countiies having a highei shaie.
Figuie 2 is equivalent to figuie 1, but without the outliei, South Afiica, which has a much highei
uNI pei capita than the othei countiies.
[Figure 1 here]
[Figure 2 here]
Table 2 fuithei shows the shaie of iesponuents with compliant anu noncompliant attituues
acioss uiffeient socioeconomic inuicatois. The fiist iow shows the shaie of iesponuents with a
compliant anu noncompliant tax attituue in the countiies of investigation. In both South Afiica
anu Kenya, moie than Su% of the iesponuents have a tax compliant attituue. In Tanzania anu
0ganua, on the othei hanu, the majoiity have a noncompliant attituue anu S4% of the
iesponuents in Tanzania, anu as many as 68% of the 0ganuans think that not paying taxes is
not wiong at all oi wiong, but unueistanuable.
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[Table 1 here]
uenuei, employment statuses anu uiban location aie measuieu in peicentages, while age is
measuieu in mean yeais. Level of schooling is measuieu by a iange vaiiable wheie u= no
foimal schooling anu 9= postgiauuate qualifications, anu wealth is measuieu by a composite
vaiiable consisting of owneiship of iauio, Tv, cai, watei, latiine anu ioof mateiial
(u=iesponuent has none of the items, 1=iesponuent has all items). The only finuing consistent in
all foui countiies is the tenuency towaius a highei mean level of schooling among iesponuents
with a compliant tax attituue. In all countiies except 0ganua, we also finu that iesponuents with
a compliant tax attituue aie oluei, ielatively wealthiei anu to a laigei uegiee live in uiban aieas
than inuiviuuals with a noncompliant attituue.
In the questionnaiie, iesponuents aie also askeu what they think is the main ieason that some
people evaue taxes. As can be seen in Table S, in all the foui countiies, taxes aie too high anu
taxes aie unaffoiuable aie the most fiequently stateu ieasons, the foimei ianging fiom 22% in
South Afiica to 28% in 0ganua anu the lattei fiom 2S% in Tanzania to 29% in 0ganua. This
inuicates that tax iates aie peiceiveu as too high both in teims of what iesponuents can affoiu
anu in teims of what is ieasonable. Anothei fiequently mentioneu ieason is pooi public
seivices. In Tanzania as many as 16% of the iesponuents consiuei pooi public seivices to be
the main ieason why some people evaue taxes. The coiiesponuing peicentages aie 12%, 11%
anu 9% in South Afiica, 0ganua anu Kenya, iespectively. 0nfaii tax system anu goveinment
wastesteal taxes aie also given as main ieasons why people avoiu taxes by moie than 8% of
the iesponuents in all the countiies. veiy few iesponuents, 1% in South Afiica anu 0ganua anu
2% in Kenya anu Tanzania, state people know they wont get caught.
[Table 3 here]
4. Correlates of factors affecting tax compliance attitude: regression model and
variables
In this section, we will look at factois that aie coiielateu with tax compliance attituue in Kenya,
Tanzania, 0ganua anu South Afiica. We will specifically examine the extent to which the
uiffeient theoiies of taxpayei compliance biiefly outlineu in section 2 contiibute to explaining
peoples attituue towaius taxation.
In oiuei to captuie factois that coiielate with tax compliance attituue, we estimate the following
logit mouel.
Probobility (Iox_complioncc_ottiJutc

) = o
1
+ o
2
X
1
+ o
3

1
+ o
4
Z
1
+ e

(1)
Iox_complioncc_ottiJutc

is the uepenuent vaiiable which is a uummy with a value of 1 foi tax

compliant attituue anu a value of u foi noncompliant attituue as measuieu in section 2 above.
X
1
is a vectoi foi inuiviuual level chaiacteiistics; age, sex, euucation, employment status, wealth,
ethnicity of the iesponuent anu whethei the inuiviuual is uibaniuial iesiuent;
1
is a vectoi foi
vaiiables that captuie uiffeient factois affecting tax compliance attituue; Z
1
is a vectoi foi
vaiiables captuiing iegional fixeu effects. The o

s aie the iespective coefficients anu e

is the
eiioi teim. The vaiiables useu to examine the uiffeient theoiies of tax compliance aie uesciibeu
below.
8

Economic deterrence
As a measuie of economic ueteiience, we use a iank vaiiable baseu on inuiviuuals iesponses to
the question Baseu on youi expeiience, how easy oi uifficult is it to avoiu paying the income oi
piopeity taxes that you owe to the goveinment.. The vaiiable ianges fiom 1=veiy easy to
4=veiy uifficult.
Fiscal exchange
A hanuful of vaiiables aie incluueu in the iegiession to captuie iesponuents satisfaction with
goveinments piovision of uiffeient goous anu seivices that citizens piefei anu that may
motivate compliance attituue. These incluue satisfaction with i) goveinments piovision of basic
health seivices anu auuiessing euucational neeus; ii) infiastiuctuie (goveinment piovision of
watei anu sanitation seivices, maintaining ioaus anu biiuges, anu piovision of ieliable supply of
electiicity); anu iii) goveinments hanuling of ciime, conflict anu coiiuption. In auuition to these
vaiiables, we also contiol foi oveiall satisfaction with ease of getting basic seivices fiom the
goveinment such as issuing iuentity caiu, householu seivices anu police seivices. These
vaiiables all iange fiom 1=veiy bauly to 4=veiy well.
Nonstate actors as service providers
Nonstate actois such as poweiful people oi gioups othei than the goveinment may pioviue
basic infiastiuctuie to citizens when goveinments become weak anu fiagile (Sacks 2u12). This
in tuin may affect the tax compliant attituue of inuiviuuals, especially if inuiviuuals aie making
payments to nonstate actois in exchange foi piotecting them, theii business anu piopeity. The
iole of nonstate actois like uonois anu Nu0s in pioviuing basic infiastiuctuie anu how that in
tuin affects tax attituues is exploieu in pievious ieseaich (Fjelustau 2uu1; Sacks 2u12).
Bowevei, the piovision of public seivices by ciiminal oiganizations anu gangs anu its ielation to
tax compliance attituue has, to oui knowleuge, not been stuuieu.
S
In this papei, we incluue a
vaiiable that captuies tax to nonstate actois, paiticulaily to ciiminal oiganizations anu gangs.
The vaiiable is measuieu by how often inuiviuuals make a payment to poweiful people oi
gioups othei than the goveinment, such as ciiminals oi gangs in theii community in ietuin foi
piotecting them, theii piopeity oi theii businesses. The vaiiable ianges fiom 1= nevei maue
payment; 2= only once; S= a few times; anu 4= often.

Political legitimacy
We use iange of vaiiables to captuie political legitimacy such as tiust in tax officials, coiiuption
of tax officials, oveiall level of satisfaction with politicians, anu inuiviuuals peiception about
theii countiys level of uemociacy. Tiust in tax officials is measuieu as a iank iesponse foi the
extent of tiust that inuiviuuals have in tax officials. The vaiiable ianges fiom 1= no tiust at all
to S= tiust a lot. Coiiuption is captuieu by inuiviuuals iesponse to how many tax officials they
think aie involveu in coiiuption. The vaiiable ianges fiom 1= none of them to S= all of them.
0veiall satisfaction with politicians is captuieu as a iank iesponse on inuiviuuals opinion
whethei they appiove oi uisappiove of the way the piesiuent, membei of pailiaments, the

5
There is a large literature on how protection or security money can be extorted in the classical, well-known
mafia style, where organised criminals use insecurity, harassment and intimidation to extort money from
individual citizens, private businesses and public officials (Gambetta, 1993; Grossman, 1995). However, this
literature does not address how these practises may impact on tax compliance.

9

piemium of the piovinces anu electeu local officials peifoimeu theii job in the past 12 months.
The iesponses iange fiom 1= stiongly uisappiove to 4= stiongly appiove. Baseu on these
iesponses, factoi analysis is maue in oiuei to have on inuicatoi foi inuiviuuals satisfaction with
politicians. Bemociacy is captuieu as a iank iesponse on inuiviuuals opinion on how much of a
uemociacy theii countiy is. The iesponse ianges fiom 1= no uemociacy to S= a full
uemociacy.

Social influence
To measuie the influence of othei peoples behavioi on tax compliance attituue, we use a
uummy that has a value of 1 if inuiviuuals think that othei people avoiu taxeu anu u otheiwise.
Comparative treatment
In oiuei to captuie inequities in the exchange ielationship between goveinment anu taxpayeis,
we use a vaiiable that is measuieu as a iank iesponse on how often inuiviuuals believe that theii
own ethnic gioup is tieateu unfaiily by the goveinment. The vaiiable ianges fiom 1= nevei to
4= always.
Knowledge about taxes
In auuition to the above stateu factois, the knowleuge base of inuiviuuals iegaiuing the types of
taxes to pay may also mattei in affecting compliance attituue. We theiefoie contiol foi tax
knowleuge, which is measuieu as a iank iesponse foi the extent of uifficulty to know the type of
taxes to pay. The iesponse ianges fiom 1=veiy easy to 4=veiy uifficult.

4.1 Results
Results in table 4 show the maiginal effects of the logit iegiession foi the foui countiies. The
stanuaiu eiiois aie piesenteu in biackets anu aie clusteieu at the uistiict level. Table S fuithei
shows the Walutest foi the fit of the logit mouel of the foui countiies. As can be seen in table S,
the null hypothesis that all the iegiessing coefficients aie jointly zeio is iejecteu at 1% level of
significance. This implies that the vaiiables incluueu in the iegiession cieate a statistically
significant impiovement in the fit of the mouel foi all the countiies.

[Table 4 here]
Although theie aie some similaiities in factois that aie coiielateu with tax compliant attituue
acioss the foui countiies, theie aie also uiffeiences. While employeu people in 0ganua aie 7%
moie likely to have tax compliant attituue, we finu the opposite effect in Kenya by almost the
same peicent. Noie yeais of schooling is founu to inciease the piobability of having a tax
compliant attituue by about S% both in Kenya anu Tanzania. We uo not finu significant vaiiation
in tax compliant attituue between male anu female, with incieaseu age oi wealth of inuiviuuals
in any of the foui countiies.
An inciease in the peiception of inuiviuuals about the uifficulty of evauing taxes of one unit
incieases the likelihoou of tax compliant attituue by S% anu 8% in Kenya anu South Afiica,
iespectively. This gives suggestive eviuence foi the economic ueteiience theoiy, which posits
that the peiception of incieaseu enfoicement that makes moie evasion uifficult will inciease tax
compliance attituue at least in Kenya anu South Afiica.
[Table 5 here]
10

In Kenya, inuiviuuals who aie moie satisfieu with goveinment piovision of infiastiuctuie such
as ioaus anu electiicity aie moie likely to have tax compliant attituue by about 1u%. In 0ganua
anu Tanzania, inuiviuuals who aie moie satisfieu with the goveinments piovision of basic
health seivices anu euucational neeus aie moie likely to have compliant attituue by 8% anu
1u%, iespectively. In auuition to basic health seivices anu euucation, satisfaction with
goveinments hanuling of ciime, conflict anu coiiuption incieases the likelihoou of having a
compliant attituue in 0ganua with 7%. In South Afiica, inuiviuuals who aie moie satisfieu with
the ease of getting vaiious seivices fiom the goveinment such as issuing of iuentity caiu,
householu seivices anu police seivices aie moie likely to have a taxcompliant attituue by about
8%. The uiffeient iesults fiom the foui countiies suggest that goveinment expenuituies may
motivate compliance anu that goveinments can inciease compliance by pioviuing goous that
citizens piefei in a moie efficient anu accessible mannei (Cowell anu uoiuon 1988; Levi 1988;
Tilly 1992; Nooie 2uu4).
Fiequent payment to nonstate actois such as ciiminals anu gangs ieuuces the likelihoou of
having a tax compliant attituue in all the foui countiies. The effect ianges fiom a uecline in
compliant attituue fiom 6% in Kenya, to 8% in 0ganua anu South Afiica anu as high as 12% in
Tanzania.
We uo not finu stiong eviuence on political legitimacy except foi a few vaiiables in South Afiica
anu Tanzania. Coiiuption of tax officials is founu to ieuuce the likelihoou of tax compliant
attituue by S% in South Afiica. In Tanzania, incieaseu level of satisfaction with the oveiall
peifoimance of politicians is founu to inciease the likelihoou of tax compliant attituue by S%.
The extent to which inuiviuuals think that theii own ethnic gioup is tieateu unfaiily compaieu
to otheis is also significantly coiielateu with compliant attituue in Tanzania anu South Afiica. As
the extent to which inuiviuuals think that theii own ethnic gioup is tieateu unfaiily incieases by
one point, the piobability of having a tax compliant attituue uecieases by S% anu 4% in
Tanzania anu South Afiica, iespectively. This may pioviue inuication towaius the compaiative
tieatment mouel, which is baseu on equity theoiy anu posits that auuiessing inequities in the
exchange ielationship between goveinment anu taxpayeis matteis foi tax compliance (Peisson,
2uu8; Rothstein 2uuS).
Tax knowleuge is significantly coiielateu with tax compliant attituue in Tanzania anu South
Afiica. An inciease in the extent of uifficulty to know the type of taxes to pay by one point
ieuuces the piobability of tax compliance attituue by 4% anu 1u% in Tanzania anu South Afiica
iespectively. This is equivalent to ieuucing the cuiient shaie of people with tax compliant
attituue, which is S4% in Tanzania anu S7% in South Afiica, to close to S1% in both countiies
uue to lack of appiopiiate tax knowleuge.
5. Robustness check
In oui pievious measuie of tax compliance attituue, we use a uummy vaiiable wheie we
categoiize inuiviuuals who iesponueu that not paying tax is not wiong anu wiong, but
unueistanuable as having a noncompliant attituue. Bowevei, it coulu also be the case that
inuiviuuals who iesponueu that not paying tax is wiong anu unueistanuable have a compliant
attituue. In this section we conuuct a iobustness check wheie we incluue all the thiee iesponses:
not wiong at all, wiong, but unueistanuable anu wiong anu punishable in a iegiession.
uiven the oiuinal natuie of the iesponses, we use oiueieu logit mouel.
11

We iefoimulate the econometiic mouel in equation (1) as follows. The uepenuent vaiiable
(Iox_complioncc_ottiJutc

) in equation (2) is an oiueieu categoiical vaiiable which ianges

fiom 1 to S (1=not wiong at all, 2=wiong but unueistanuable, anu S=wiong anu punishable). We
assume that theie is a latent vaiiable Iox_complioncc_ottiJutc

given by the following

expiession;
Iox_complioncc_ottiJutc

= o
1
+ o
2
X
1
+ o
3

1
+ o
4
Z
1
+ e

(2)
Assuming that e

is a ianuom, noimally uistiibuteu, vaiiable, the link between the obseiveu anu
the latent vaiiable is given by;
P [Iox
CompI

= 1|I

= (p
1
-I

y)
P [Iox
CompI

= 2|I

= (p
2
-I

y) -(p
1
- I

y)
P [Iox
CompI

= S|I

= 1 - (p
2
- I

y),
wheie is a cumulative noimal uistiibution function of e

, y = |o
1
, o
2
, o
3,
o
4
] aie the
coefficients of the explanatoiy vaiiables in equation 2, anu p
1
anu p
2
aie the unknown thiesholu
paiameteis that uiffeientiate the categoiies. The mouel is estimateu by maximum likelihoou foi
each countiy.
5.1 Results
Table 6 shows the maiginal effects of the oiueieu logit iegiession foi the thiee iesponses of the
foui countiies. Nost of oui iesults aie consistent with the finuings of the binaiy logit iegiession
piesenteu in table S. Bowevei, we finu even stiongei eviuence foi the economic ueteiience
theoiy foi all the foui countiies in the iegiession. An inciease in the peiception of inuiviuuals
about the uifficulty of evauing taxes by one point incieases the likelihoou of iesponuing wiong
not to pay taxes by 4% in Kenya, S% in 0ganua, 6% in Tanzania anu 7% in South Afiica. 0n the
othei hanu, an inciease in uifficulty of evasion ieuuces the likelihoou of iesponuing wiong but
unueistanuable anu not wiong at all in all the foui countiies.
Similai to finuings in the logit iegiession, in Tanzania anu 0ganua inuiviuuals who aie moie
satisfieu with the goveinments piovision of basic health seivices anu auuiessing euucational
neeus aie moie likely to iesponu wiong not to pay taxes, anu aie also less likely to iesponu
wiong but unueistanuable anu not wiong at all. In 0ganua, satisfaction with goveinments
hanuling of ciime, conflict anu coiiuption is moie likely to make inuiviuuals iesponu wiong not
to pay taxes, anu less likely to iesponu wiong but unueistanuable anu not wiong at all.
Again, similai to the finuings in the logit iegiession, iesponuents in Kenya who aie moie
satisfieu with goveinment hanuling of infiastiuctuie such as ioaus anu electiicity aie moie
likely to iesponu wiong not to pay taxes anu less likely to iesponu wiong anu
unueistanuable anu not wiong at all. In South Afiica, satisfaction with goveinment piovision
of basic seivices such as issuing iuentity caiu, householu seivices anu police seivices make
people moie likely to iesponu that wiong not to pay taxes anu less likely to iesponu wiong
anu unueistanuable anu not wiong at all.
[Table 6 here]
12

Consistent iesults aie also founu with nonstate actois as in the logit iegiession. Inuiviuuals who
make fiequent payment to nonstate actois such as ciiminals anu gangs aie less likely to
iesponu wiong not to pay taxes anu moie likely to iesponu wiong anu unueistanuable anu
not wiong at all.
In the oiueieu logit iegiession, we uo not finu much eviuence on political legitimacy except foi
coiiuption in South Afiica, which uepicts similai iesults as in the logit iegiession. Inuiviuuals
who think that tax officials aie coiiupt aie less likely to iesponu wiong not to pay taxes anu
moie likely to iesponu wiong anu unueistanuable anu not wiong at all.
Knowleuge about tax is still impoitant anu an inciease in the extent of uifficulty to know the
type of taxes to pay ieuuces the likelihoou of inuiviuuals to iesponu wiong not to pay taxes
anu incieases the likelihoou to iesponu wiong anu unueistanuable anu not wiong at all in
South Afiica, Kenya anu Tanzania, although the lattei is significant only at 1u%.
6. Conclusion
In this papei, we exploie factois that ueteimine citizens tax compliance behavioi in Kenya,
Tanzania, 0ganua anu South Afiica using attituue anu peiception uata fiom the new iounu S of
Afiobaiometei suiveys. The suivey incluues a seiies of theoietically iooteu questions about
citizens views about taxation. A main challenge was to finu an accuiate pioxy foi taxpayei
compliance since inuiviuuals iepoiting of own compliance is likely to be oveiiepoiteu. Thus we
useu an inuiiectly phiaseu question on iesponuents opinion about othei peoples action of
whethei not paying taxes is wiong oi not.
Results fiom the logit iegiession pioviue iobust iesults foi two ueteiminants of tax compliance.
We finu that inuiviuuals aie moie likely to expiess tax compliant attituue if they peiceive that
enfoicement makes evasion moie uifficult in South Afiica anu Kenya. This is in line with the
piesciiption of the stanuaiu economic theoiy of ueteiience. The analysis also finus eviuence
that those who aie moie satisfieu with public seivice piovision aie moie likely to suppoit the
goveinments iight to tax in all the foui countiies, suppoiting ceitain elements of the fiscal
exchange theoiy. Bowevei, the link between tax compliance attituue anu public seivice
piovision uepenus on the specific seivice in question anu uiffeis between countiies. While
access to infiastiuctuie such as ioaus anu electiicity encouiage tax compliant attituue in Kenya,
iesponuents in Tanzania anu 0ganua iefei to euucation anu health seivices as key to theii tax
compliance. In South Afiica, goveinment piovision of issuing iuentity caius anu police seivices
aie moie likely to suppoit tax compliant attituue.
A key finuing of the stuuy that applies to all the selecteu countiies is that payment to nonstate
actois such as ciiminal gangs foi piotection ieuuces tax compliant attituue. Pievious ieseaich
suggests that the way the state tieats inuiviuuals oi gioups ielative to theii fellow citizens is an
impoitant factoi in ueteimining taxpayei compliance attituue (BAicy 2u11). We have testeu
this hypothesis by examining how citizens peiceive theii ethnic gioup is tieateu by the
goveinment compaieu to othei gioups. 0nly in South Afiica anu Tanzania this seems to mattei
foi tax compliant attituue. The stuuy finus no stiong eviuence that political legitimacy, e.g. tiust
in goveinment policy anu institutions, impacts on taxpayeis compliance attituue. These finuings
aie iobust foi a uiffeient econometiic estimation, wheie we incluue all the iesponses of
inuiviuuals iegaiuing othei peoples action about tax in an oiueieu logit iegiession.
13

The stuuy pioviues us with some uiiections foi fuithei ieseaich. Foi an impioveu
unueistanuing of tax compliance attituue anu behavioi in Afiica, theie is a neeu foi a moie
thoiough examination of the concept of faiiness in fiscal exchange, i.e., the contiactual
ielationship between taxpayeis anu the goveinment. In this context it is also ielevant to analyze
if anu when usei chaiges aie to be piefeiieu insteau of geneial taxes to finance public
seivices. Ciitical factois in this iespect aie citizens' peiceptions about the iole of the state, how
the tax law is auministiateu, peiceptions about enfoicement, goveinment tiustwoithiness, anu
impacts of payments to nonstate actois may have on tax compliance. Fuitheimoie, theie is a
neeu foi ieseaich focusing on faiiness in tax collection anu compaiative tieatments of taxpayeis.
Can, anu unuei what conuitions, compliance be establisheu in Afiican countiies without an
extensive anu costly enfoicement appaiatus. This question is impoitant because it is likely that
goveinments, seeking powei on the basis of populai consent, face iestiictions in theii use of
coeicion in tax collection. Thus, the challenge foi taxation in Afiica is to iaise uomestic ievenues
fiom consenting citizens.

14

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16

Tables

Table 2: Biffeiences in backgiounu vaiiables between iesponuents with tax compliant anu non
compliant attituue

South Afiica Kenya Tanzania 0ganua

Non
complian
t attituue
Compliant
attituue
Non
compliant
attituue
Compliant
attituue
Non
compliant
attituue
Compliant
attituue
Non
compliant
attituue
Compliant
attituue
Total 4S % S7 % 46 % S4 % S4 % 47 % 68 % S2 %
Nale Su % Su % 47 % SS % S1 % S1 % S2 % 49 %
Employeu SS % S9 % 47 % 4S % S9 % S4 % 48 % S1 %
Self
employeu
1S % 1S % 68 % 6S % S2 % SS % 8S % 77 %
0iban 68 % 69 % S8 % 4u % Su % SS % 16 % 1S %
Age (mean) S7.7 4u.S SS.4 S6.2 S8.1 S9.1 SS.4 S4.4
Level of
schooling
(mean)
4.2 4.4 S.8 4.1 2.9 S.2 S.S S.4
Wealth u.S8 u.6S u.49 u.S4 u.S9 u.41 u.21 u.2u

6
All numbers are from World Development Indicators 2012 (World Bank 2012) unless else is specified
7
World Development Indicators 2011 (World Bank 2011)
8
Economist Intelligence Unit (EIU) democracy index 2011, 0 =authoritarian regime and 10=full democracy
(EIU 2011: 30)
Table 1: Nacioeconomic inuicatois
Inuicatoi6 South Afiica Kenya Tanzania 0ganua SSA
Population (million) Su 41 4S SS 84u
uNI pei capita (cuiient 0SB) 6 u9u 79u SSu Suu 1 127
Tax ievenue of uBP (%) 29 19.S 14 12 187
0iban population (% of total) 62 22 26 1S S7
uini inuex u.6S u.48 u.S8 u.44
Bemociacy inuex8, 2u11 7.8 4.7 S.6 S.1 4.S
17

Table S: Reasons why some people evaue taxes, %

South Afiica Kenya Tanzania 0ganua
0nfaii tax system 8 8 11 11
Taxes aie too high 22 2S 2S 28
Taxes aie unaffoiuable 27 26 2S 29
Pooi public seivices 12 9 16 11
The goveinment waste steal taxes 11 1u 9 8
People know they won't get caught 1 2 2 1
0thei 2u 2S 12 12
Total 1uu 1uu 1uu 1uu

Table 4: Walu test foi binaiy logit iegiessions

South Afiica Kenya Tanzania 0ganua
Chi2 S78 S42 61u 1S48
Begiees of fieeuom S4 SS S2 S1
Piob > chi2 = u.uu u.uu u.uu u.uu

18

Table S: Binaiy logistic iegiessions with maiginal effects

South Afiica Kenya Tanzania 0ganua
Individual characteristics
Age u.uu u.uu u.u1* u.uu
(u.u1) (u.u1) (u.u1) (u.u1)
Age2 u.uu u.uu u.uu u.uu
(u.uu) (u.uu) (u.uu) (u.uu)
Nale (u) u.u2 u.u1 u.uS u.u2
(u.uS) (u.uS) (u.u2) (u.uS)
Selfemployeu (u) u.u1 u.u1 u.uu u.u8
(u.u4) (u.u4) (u.uS) (u.u7)
Employeu (u) u.u2 u.u8** u.uS u.u7**
(u.u4) (u.u4) (u.uS) (u.u4)
Schooling u.uu u.uS** u.uS** u.u1
(u.u1) (u.u1) (u.u1) (u.u1)
Wealth u.u7 u.1u u.uS u.u8
(u.uS) (u.u6) (u.u8) (u.u8)
0iban (u) u.u2 u.u4 u.u2 u.u6
(u.u4) (u.u4) (u.u4) (u.u6)
Economic deterrence
Bifficulty of evauing tax u.u8*** u.uS** u.u4 u.uS
(u.uS) (u.u2) (u.uS) (u.u2)
Fiscal exchange
Bealth anu euucation u.uu u.u1 u.1u*** u.u8***
(u.uS) (u.uS) (u.u2) (u.u2)
Infiastiuctuie u.uu u.u9*** u.uu u.u1
(u.u4) (u.uS) (u.uS) (u.uS)
Ciime, conflict anu coiiuption u.u4 u.uS u.u1 u.u7**
(u.u4) (u.uS) (u.uS) (u.uS)
Basic seivices fiom the goveinment u.u8*** u.uS u.u1 u.u1
(u.u2) (u.uS) (u.uS) (u.u2)
Social influence
Peiceiveu compliance of otheis u.uS u.u1 u.u9*** u.u2
(u.uS) (u.u4) (u.uS) (u.u4)
Comparative treatment
0nfaii tieatment of own ethnic gioup u.u4* u.u2 u.uS** u.uS
(u.u2) (u.u1) (u.u2) (u.uS)
Political legitimacy
Tiust u.u1 u.u2 u.u1 u.u1
(u.u2) (u.u2) (u.u1) (u.u1)
Coiiuption u.uS*** u.u2 u.uu u.u2
(u.u1) (u.u2) (u.u1) (u.u2)
Satisfaction with politicians u.u1 u.u1 u.uS* u.u1
(u.u2) (u.u2) (u.u2) (u.uS)
Bemociacy u.u2 u.u2 u.u1 u.uu
19

(u.u2) (u.u2) (u.u1) (u.u2)

Nonstate actors
Payments to nonstate actois u.u8** u.u6** u.12*** u.u8**
(u.u4) (u.uS) (u.u4) (u.u4)
Knowledge about taxes
Bifficulty finuing out what taxes to pay u.1u*** u.uS u.u4** u.uu
(u.uS) (u.u2) (u.u2) (u.u2)
value auueu tax u.19*** u.Su*** u.17*** u.17***
(u.uS) (u.uS) (u.u4) (u.u4)
Region fixeu effects Yes Yes Yes Yes
Ethnicity fixeu effects Yes Yes Yes Yes
Religion fixeu effects Yes Yes Yes Yes
Numbei of obseivations 1Su8 14S2 19uu 141u
Pseuuo R2 u.12 u.1S u.12 u.1u

20

Table 6 : 0iueieu logistic iegiessions with maiginal effects

South Africa Kenya Tanzania Uganda

Wiong
Wiong, but
unueistanu
able
Not
wiong
Wiong
Wiong, but
unueistanu
able
Not
wiong
Wiong
Wiong, but
unueistan
uable
Not
wiong
Wiong
Wiong, but
unueistanu
able
Not
wiong

Inuiviuual fixeu effects Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Economic deterrence

Bifficulty of evauing tax u.u7** u.u6** u.u1** u.uS*** u.u4*** u.u1** u.u6*** u.uS*** u.uS*** u.uS** u.u2** u.uS*

(u.uS) (u.u2) (u.uu) (u.u2) (u.u1) (u.u1) (u.u2) (u.u1) (u.u1) (u.uS) (u.u1) (u.u2)
Fiscal exchange

Bealth anu euucation u.u1 u.u1 u.uu u.u1 u.u1 u.uu u.u8*** u.u4*** u.u4*** u.u7*** u.uS*** u.u4***

(u.uS) (u.u2) (u.uu) (u.uS) (u.u2) (u.u1) (u.u2) (u.u1) (u.u1) (u.u2) (u.u1) (u.u1)
Infiastiuctuie u.u1 u.u1 u.uu u.u9*** u.u6*** u.u2*** u.uu u.uu u.uu u.u1 u.u1 u.u1

(u.u4) (u.uS) (u.u1) (u.uS) (u.u2) (u.u1) (u.uS) (u.u1) (u.u1) (u.u2) (u.u1) (u.u1)
Ciime, conflict anu
coiiuption
u.uS u.u2 u.uu u.u2 u.u1 u.u1 u.u2 u.u1 u.u1 u.u8** u.u4** u.uS**

(u.u4) (u.uS) (u.u1) (u.uS) (u.u2) (u.u1) (u.uS) (u.u1) (u.u1) (u.uS) (u.u2) (u.u2)
Basic seivices u.u8*** u.u7*** u.u1*** u.u4 u.uS u.u1 u.u2 u.u1 u.u1 u.u2 u.u1 u.u1

(u.u2) (u.u2) (u.uu) (u.uS) (u.u2) (u.u1) (u.uS) (u.u1) (u.u1) (u.u2) (u.u1) (u.u1)
21

Social influence

Compliance of otheis u.uS u.u4 u.u1 u.u4 u.uS u.u1 u.u8** u.u4** u.u4** u.u2 u.u1 u.u1

(u.uS) (u.uS) (u.u1) (u.u4) (u.uS) (u.u1) (u.uS) (u.u2) (u.u2) (u.u4) (u.u2) (u.u2)
Comparative
treatment


0wn ethnic gioup
tieateu unfaiily
u.u6** u.uS** u.u1* u.u2 u.u1 u.u1 u.uS u.u1 u.u2 u.uS u.u1 u.u1

(u.uS) (u.u2) (u.uu) (u.u1) (u.u1) (u.uu) (u.u2) (u.u1) (u.u1) (u.u2) (u.u1) (u.u1)
Political lecitimacy

Tiust u.u1 u.u1 u.uu u.u2 u.u1 u.u1 u.u1 u.uu u.uu u.u1* u.u1 u.u1

(u.u2) (u.u1) (u.uu) (u.u1) (u.u1) (u.uu) (u.u1) (u.u1) (u.u1) (u.u1) (u.uu) (u.uu)
Coiiuption u.u4*** u.u4*** u.u1*** u.u1 u.uu u.uu u.u1 u.uu u.uu u.u2 u.u1 u.u1

(u.u1) (u.u1) (u.uu) (u.u2) (u.u1) (u.u1) (u.u1) (u.u1) (u.u1) (u.u2) (u.u1) (u.u1)
Satisfaction with
politicians
u.u1 u.u1 u.uu u.u1 u.u1 u.uu u.u2 u.u1 u.u1 u.u1 u.uu u.uu

(u.u2) (u.u2) (u.uu) (u.u1) (u.u1) (u.uu) (u.u2) (u.u1) (u.u1) (u.uS) (u.u1) (u.u2)
Bemociacy u.u2 u.u1 u.uu u.uS u.u2 u.u1 u.u2 u.u1 u.u1 u.u1 u.u1 u.u1

(u.u1) (u.u1) (u.uu) (u.u2) (u.u2) (u.u1) (u.u1) (u.u1) (u.u1) (u.u2) (u.u1) (u.u1)
Nonstate actors

Payments to nonstate
actois
u.u9*** u.u8*** u.u1*** u.u7** u.uS* u.u2** u.12*** u.u6*** u.u7*** u.u6** u.u2* u.uS**
22

(u.uS) (u.u2) (u.uu) (u.u4) (u.uS) (u.u1) (u.u4) (u.u2) (u.u2) (u.uS) (u.u1) (u.u1)
Knowledge about
taxes


Bifficulty finuing out
what taxes to pay
u.11*** u.u9*** u.u2*** u.u7*** u.uS*** u.u2*** u.uS* u.u1* u.u2* u.uu u.uu u.uu

(u.uS) (u.u2) (u.uu) (u.u2) (u.u2) (u.u1) (u.u2) (u.u1) (u.u1) (u.u2) (u.u1) (u.u1)
value auueu tax u.2u*** u.16*** u.u4*** u.29*** u.18*** u.11*** u.19*** u.u9*** u.1u*** u.2u*** u.1u*** u.1u***

(u.u4) (u.u4) (u.u1) (u.uS) (u.uS) (u.uS) (u.u4) (u.u2) (u.u2) (u.u4) (u.u2) (u.u2)
Region fixeu effects Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Ethnicity fixeu effects Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Religion fixeu effects Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Numbei of
obseivations
1Su8 1Su8 1Su8 14S2 14S2 14S2 19uu 19uu 19uu 141u 141u 141u
Pseuuo R
2
u.11 u.11 u.11u u.11 u.11 u.11 u.u9 u.u9 u.u9 u.u8 u.u8 u.u8

23

Figures
Figure1:TaxcompliantattitudeandGNIpercapita

Figure2:TaxcompliantattitudeandGNIpercapitawithoutSouthAfrica

24

Appendix1

Table A1: Descriptive statistics for all variables
South Africa Kenya Tanzania Uganda

Description
Mea
n
Std.
Dev.
Mi
n
Ma
x
Mea
n
Std.
Dev.
Mi
n
Ma
x
Mea
n
Std.
Dev.
Mi
n
Ma
x
Mea
n
Std.
Dev.
Mi
n
Ma
x
Dependent variable
Tax compliant attitude
Dummy =1 if individual think
it is wrong and punishable not
to pay taxes, 0 otherwise
0.57 0.49 0 1 0.54 0.50 0 1 0.47 0.50 0 1 0.32 0.47 0 1
Individual characteristics
Age Age of respondent 39.2 15.9 18 95 35.8 13.5 18 93 38.6 14.3 18 99 35.2 12.8 18 84

Male
Dummy =1 if respondent is
male
0.50 0.50 0 1 0.50 0.50 0 1 0.50 0.50 0 1 0.50 0.50 0 1
Self-employment
Dummy1 =if self-employed, 0
otherwise
0.13 0.34 0 1 0.65 0.48 0 1 0.53 0.50 0 1 0.80 0.40 0 1

Employment
Dummy =1 if employed, 0 if
unemployed
0.37 0.48 0 1 0.45 0.50 0 1 0.36 0.48 0 1 0.48 0.50 0 1
Schooling
9 =postgraduate qualifications,
0 =no formal schooling,
4.27 1.56 0 9 3.91 1.81 0 9 3.01 1.39 0 9 3.28 1.86 0 9

Wealth
Index for ownership of radio,
TV, car, water, latrine and roof
material. 1=respondent has all
items and 0 =respondent has
none
0.62 0.33 0 1 0.51 0.25 0 1 0.39 0.23 0 1 0.20 0.23 0 1
Urban
Dummy =1 if household is
located in urban area
0.67 0.47 0 1 0.38 0.49 0 1 0.32 0.47 0 1 0.14 0.35 0 1
Economic deterrence
Ease of evasion 1 =very easy, 4 =very difficult 2.96 0.80 1 4 3.25 0.76 1 4 3.22 0.79 1 4 3.26 0.80 1 4
Fiscal exchange

Health and education
Factor for satisfaction with
health and educational services.
4 =Very well, 1 =very badly,
0 =dont know
2.73 0.79 0 4 2.69 0.79 0 4 2.38 0.82 0 4 2.58 0.72 0 4
Infrastructure Factor for satisfaction with 2.64 0.73 0 4 2.59 0.91 0 4 2.18 0.71 0 4 1.94 0.69 0 4
25

water, roads, electricity and

environment.4 =Very well, 1 =
very badly, 0 =dont know
Crime and conflict
Factor for satisfaction with
crime, conflict, corruption and
terrorism. 4 =Very well, 1 =
very badly, 0 =dont know
2.14 0.78 0 4 2.11 0.74 0 4 2.33 0.70 0 4 2.16 0.73 0 4
Infrastructure
Factor for satisfaction with
electricity, water, sewage, cell
phone services and paved road.
4 =Very well, 1 =very badly,
0 =dont know
2.64 0.73 0 4 2.59 0.91 0 4 2.18 0.71 0 4 1.94 0.69 0 4

Social influence

Tax compliance of
others
Perceived tax avoidance of
others 1=never or rarely, 0 =
always or often
0.61 0.49 0 1 0.72 0.45 0 1 0.70 0.46 0 1 0.75 0.43 0 1
Comparative treatment

Unfair treatment of
own ethnic group
Perceived frequency of
discrimination against own
ethnic group. 4 =always, 1 =
never
1.67 0.94 1 4 1.97 1.02 1 4 1.48 0.79 1 4 2.13 1.01 1 4
Political legitimacy
Trust
Trust in tax department. 5 =a
lot, 1 =not at all
3.55 1.31 1 5 2.99 1.34 1 5 3.15 1.34 1 5 2.74 1.37 1 5
Corruption
Perceived corruption among
tax officials. 5 =all, 1 =none
2.48 1.12 1 5 2.98 1.13 1 5 2.84 1.17 1 5 3.11 1.24 1 5

Satisfaction with
politicians
Factor for satisfaction with
president, prime minister, MP
and local government. 5 =
Strongly approve, 1 =strongly
disapprove.
3.22 1.01 1 5 2.86 1.14 1 5 3.45 1.09 1 5 3.19 1.04 1 5
Democracy
Perception/satisfaction with
democracy. 5 =full
democracy/very satisfied, 1 =
not a democracy/not satisfied
3.39 1.13 1 5 2.96 1.10 1 5 3.70 1.06 1 5 3.08 1.18 1 5
Non-state actors
26

Payments to non-state
actors
Payments to powerful
people/groups other than the
government. 4 =Often and 1 =
Never
1.18 0.57 1 4 1.24 0.68 1 4 1.17 0.50 1 4 1.25 0.62 1 4
Knowledge about tax

Ease of finding out
which taxes to pay
4 =Very difficult and 1 =very
easy
2.68 0.81 1 4 3.10 0.83 1 4 3.14 0.88 1 4 3.10 0.89 1 4
Required to pay VAT
Dummy =1 if respondent is
required to pay value added tax
0.76 0.43 0 1 0.73 0.44 0 1 0.42 0.49 0 1 0.39 0.49 0 1

Number of
observations
2399 2399 2400 2400